Вы находитесь на странице: 1из 26

Running Head: THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

The Insurance Industry in the Cayman Islands


Katheryne Gonzalez Ramirez
International College of the Cayman Islands
Dr. Trevor Stewart
December 11, 2016

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

Abstract
The insurance industry in the Cayman Islands offers a broad range of insurance products through
the different license classification of insurance business in accordance with the Insurance
Supervision Division of Cayman Islands Monetary Authority. The purpose of this paper is to
provide an overview of the insurance market in the Cayman Islands. Therefore, this paper
consists of three major reforms that mandate the regulations for the various insurance entities.
Furthermore, through the Insurance Law 2010, the Cayman Islands Monetary Authority was
assigned as the insurance-related entities regulator. The type of insurance license permits a local
or an external insurer to carry on domestic insurance business or limited insurance business
reinsurance in the market as approved by the Authority. Additionally, different trade associations
ensure compliance with the laws and regulations for insurance-related entities to protect the
public interest. Overall, covering the insurance sector in the Cayman Islands that is mandated by
law and tailored to the demand and needs of individuals and businesses.

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

The Insurance Industry in the Cayman Islands


Introduction
Insurance is the pooling of fortuitous losses through the issuance of a contract with an
insurer, which abides to indemnify of such loss the insured individual or business. The Cayman
Islands is a jurisdiction that is built between the British and American insurance practice. The
insurance laws and regulations for insurance companies varies per class of insurers. Furthermore,
in 1979 within the Cayman Islands, the Insurance Law was passed through legislation and lead
this jurisdiction to become one of the major centers for international insurance business (CIMA,
2010). Thus, the Cayman Islands Monetary Authority (CIMA) was given the responsibility to
regulate the insurance industry in the Cayman Islands after the Insurance Law 2010 was passed.
In addition, the Health Insurance Law and Regulation and Pension (Amendment) Law are other
essential laws in the insurance industry in the Cayman Islands. Correspondingly, different trade
associations regulate insurance-related entities. According to CIMA, there are over 864 insurance
related licensees, who are under the supervision of the Insurance Supervision Division of
Cayman Islands Monetary Authority (CIMA, 2016). The type of license determines the
classification of the insurance industry within the Cayman Islands (CIMA, 2016). Furthermore,
this paper focus on providing an overview of the local insurance laws, regulators, local insurance
entities and insurance products offered within the Cayman Islands.
Laws and Regulations
One of the primary law within the Cayman Islands is the Insurance Law 2010. The law
states the minimum requirements and licensing an organization must meet to carry out contracts
of insurance. Under the law there are four categories of insurance license that are granted by
CIMA in accordance with the insurance business. The categories consist of Class A, Class B,

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

Class C and Class D, but the two main insurer are Class A (domestic Insurers) and Class B
(captives). Class A Insurers License permits a local or an external insurer to carry on domestic
insurance business. Then, Class B Insurer permits business to carry on captive insurance business
whether restricted or unrestricted. The Insurance Law 2010 is meant to set the process and
standards for organizations to follow in order to become a licensed insurance.
Likewise, the Cayman Islands government has enforced since 1998 the Health Insurance
Law and Regulation (Department of Health Regulatory Services, 2016). The law created a
framework for the healthcare system on the island. Consequently, it stipulates that all employees
and resident of the Cayman Islands is required to have an active health insurance plan in place.
Moreover, the Health Insurance Law and Regulation sets the minimum standards that business
must follow to provide health insurance coverage to their employees (Department of Health
Regulatory Services, 2016). For example, the employers are mandated to provide a Standard
Health Insurance Contract plan for their employees. Likewise, employers are responsible for
providing health insurance to all staff and dependents of the employees. As well, the medical
insurance plan must be furnished by the health insurance company approved by the Health
Insurance Commission. Furthermore, the law stipulates that 50% of the premium is paid by the
employer and the remaining 50% by the employee (Department of Health Regulatory Services,
2016). On the other hand, the employees dependent is deducted from employees salary.
Overall, the residents of the Cayman Islands are mandated by law to have a health insurance plan
in force by the approved insurance companies.
Consequently, the Pension (Amendment) Law came into effect on January 1st, 1992 and
had been refurbished throughout the years. Furthermore, the Cayman Islands Pension Law
requires and the equivalent of 10% or more of contribution between employers and employees

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

out of the monthly salary of an employee. Likewise, the Cayman Islands pension system is
divided into private and public sectors which are governed by separate legislations. For example,
the private pension is regulated by the Cayman Islands Monetary Authority; whereas the public
pension fund is administered by the Public Service Pension Board. Additionally, from 2000
onwards, the Public Service Pensions Board established a total contribution of 12% pensionable
earnings. Moreover, in accordance with the latest review of the Cayman Islands National
Pensions (Amendment) Bill, 2016 the retirement age was increased from 60 to 65 years and
reduced to a six-month period from which an employer is required to commence pension
contribution.
Trade Associations
Consistently, within the Cayman Islands, different trade associations who regulate the
insurance-related entities. Those trade associations are Cayman Islands Monetary Authority
(CIMA), Insurance Managers Associations of the Cayman Islands (IMAC), Cayman Islands
Insurance Association (CIIA), and the Department of Health Regulatory Services. The Cayman
Islands Monetary Authority (CIMA) is a national association in charge of supervising and
implementing regulations to the insurance entities within the Cayman Islands. Likewise, the
Insurance Supervision Division primary purpose is to promote and maintain a resilient financial
system by performing on-site and off-site monitoring approaches. The primary off-site
monitoring includes reviewing annual audited financial statements and ensuring that the licensee
maintains capital requirements. Then, the on-site monitoring is performing inspections where
they review the policies and procedures related to internal controls, business operations, and antimoney laundering. Overall, CIMA enforces the laws and regulations for insurance entities;

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

therefore, if there are breaches of those enforcements they investigate and take any necessary
action.
Furthermore, the Cayman Islands Insurance Association (CIIA) was created in 2004 with
the purpose of bringing together the various associations representing the insurance industry.
(Cayman Islands Insurance Association, 2004) The association is a single body that is composed
of agents, brokers, and companies, who works along the side of CIMA to develop Codes of
Conduct to protect the public interest. Likewise, CIIA creates and maintain high standards of
services, ethics, transparency and good practice to promote the national and international
reputation of the insurance market in the Cayman Islands. (Cayman Islands Insurance
Association, 2004) CIIA code of conduct for Cayman Islands Insurance Brokers, are standards
that assure public confidence and promote integrity in the trading practice of insurance
companies. (Cayman Islands Insurance Association, 2004)
Another trade organization in the Cayman Islands is the Insurance Managers Association
of Cayman (IMAC). The IMAC is a non-profit organization run by and for the Caymans captive
insurance industry, along with insurance managers. (Insurance Managers Association of Cayman,
n.d.) A captive insurer is an insurance company created by non-insurance organizations to
insured their risk; in other words, to provide self-insurance. (Rejda & McNamara, 2014) The
main purpose of the association is to promote the cooperation of captive insurance industry with
local government, regulators and other entities to develop prosperity of the industry. The
organization purpose is to promote quality, integrity, and intellect of the industry to sustain
innovation and constant growth within the insurance industry.
Similarly, the Department of Health Regulatory Services monitors and regulates the
health insurance in the Cayman Islands (Department of Health Regulatory Services, 2016).

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

Furthermore, the Health Insurance Commission was created on July 1st, 2008 with the purpose
of assisting the public with resolutions on complaints related to the health insurance provision
(Department of Health Regulatory Services, 2016). Likewise, the premiums rates are assessed
and monitored by the Commission and advise the Minister on any amendments to the Health
Insurance Law and Regulation.
Insurance Coverages
As previously mentioned, there are around 864 entities under the insurance industry and
are categorized as Class A, Class B, Class C and Class D (CIMA, 2016). Consequently, there are
different insurance coverages offered to the general public. Class A insurers are domestic insurer
permitted by the law to offer insurance coverages such as motor, property, health, marine,
aviation, life, annuities, workersmens compensation, liability, and casualty.
The Motor Insurance provides coverage for liability to protect the driver from any injury
obtain in the case of a vehicle accident. Likewise, the coverage is extended to damage of third
parties and protection against their motor vehicle. In other words, liability coverage protects the
insured from bodily injury and property damage liability arising out of the negligent operation of
an auto or trailer (Rejda & McNamara, 2014). In other words, it provides the basic liability
coverage; also, provides protection if the insured vehicle is damaged because of a collision
caused by a third party. Moreover, other additional coverages offered by insurers are fire, theft,
vandalism, damage to the windscreen, hurricane, flood, and other natural disasters. Then,
property insurance offers protection against damage incurred to the dwelling, other structures,
personal property, additional living expenses, personal liability claims, and medical payments
arising from unexpected perils.

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

Another coverage offered in the Cayman Islands is marine insurance which is regularly
associated with maritime transport of goods, but it also includes land and air cargo shipments.
(Thowseaf & Millath, 2015)The coverage varies by the policy contract the insurer offers to the
assured. For example, the insurance can provide liability coverage to a third party incidental
incurred loss where the policyholder is responsible or liable. Likewise, marine insurance has a
different type of coverages, such as liability insurance, hull, cargo, and freight insurance. Marine
hull insurance, provide coverage for the body of the ship and machinery within the vessel that
arises from maritime perils (Thowseaf & Millath, 2015). The maritime perils include fire,
collision, accidents in loading and discharging the cargo (Thowseaf & Millath, 2015). Then,
marine cargo insurance covers for damages incurred to the goods transported by the policyholder
(Thowseaf & Millath, 2015). As well, freight insurance provides protection against the loss of
goods in case of damaged or stolen shipment (Thowseaf & Millath, 2015). The different ranges
of insurance offered within the marine insurance coverage it allow consumers to protect
themselves from potential risk that might arise in the processes of transporting goods through
marine waters and land.
Furthermore, the coverage of aviation insurance is crafted to provide coverage of losses
resulting from risk aircraft operations. There is a broad range of coverages offered within the
aviation insurance, such as hull insurance and casualty and liability coverage (Woodward, n.d.).
Hull insurance can be offered in two branches ground risk hull (Non-Motion) and ground risk
hull (Motion) insurance (Aviation Insurance, 2016). For example, non-motion covers damages
such as vandalism, theft, lighting, and within other perils that occurred on the ground with no
motion (Aviation Insurance, 2016). Then, the ground risk hull (motion) provides coverage for
losses incurred while taking off or on air (Aviation Insurance, 2016). Consequently, liability

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

insurance covers damages to third party entities and properties while the plane was in operation
(Aviation Insurance, 2016). Likewise, there is an exclusive coverage known as passenger liability
insurance that provides coverage for passengers and pilots in case of injuries or fatalities occur
due to aircraft accidents (Aviation Insurance, 2016).
As well, Annuities and life insurance are policies offered to individuals within the
Cayman Islands to protect themselves from death uncertainty and provide an economic stability
prior or after death. Furthermore, annuities provide a guarantee of a lifetime income stream that
cannot be outlived by the policyholder (Rejda & McNamara, 2014). Whereas, life insurance is a
policy that provides economical protection to loved ones when the head of the family dies
unexpectedly and leaves financial debts behind.
Class A Local Insurance Entities
Moreover, within the Cayman Islands, there are 9 insurance companies registered with
CIMA as Class A Local Insurance Company who offered all the insurance coverages mentioned
above (CIMA, 2016). The list consist of BAF Insurance Company (Cayman) Limited, British
Caymanian Insurance Company Ltd., Cayman First Insurance Company Limited, Cayman
Islands National Insurance Company Ltd., Island Heritage Insurance Company, Ltd., PanAmerican Life Insurance Company of the Cayman Islands, Sagicor Life of the Cayman Islands
Ltd., Saxon Motor & General Insurance Company Ltd., and The Insurance Company of the West
Indies (Cayman) Limited. (CIMA, 2016)
The BAF Insurance Company is a subsidiary of BAF (Holding) Cayman that provides
health insurance plans to meet the needs of residents. (BAF Insurance Company, 2010) The
organization provides a flexible and safe alternative for medium and large size companies in
accordance with their demands. Consequently, they are committed to providing affordable Health

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

10

Insurance Plans that are designed to meet the need of residents. The BAF offer three health plans
which start with the basic SHIC plan, then the BAF MedSafe SHIC Plus, and the Value PLUS
Plan (BAF Insurance Company, n.d.). The SHIC is the mandatory health care coverage that
provides protection for the basic health needs. For example, medical benefits, out-patient
benefits such as regular doctor's visit, air ambulance for life threating emergency, repatriation of
remains and in-patient benefits (BAF Insurance Company, n.d.). Then the BAF MedSafe SHIC
Plus provide coverage for a group of five or more persons. At last, the Value PLUS has
additional coverage for dental and vision care.
Then, British Caymanian Insurance Company Ltd. is an international organization, who
offer a broad range of products and services into regional markets by group members, affiliated
and agents. Furthermore, in the Cayman Islands, Britcay is an insurance company that provides
health, motor, pension and life insurance for business and individuals (Colonial Group
International, 2016). Consequently, the health plans the organization offers fit the needs of
companies and employees such as premium rates and individual health coverages. Some of the
benefits are therapeutic services, maternity care, post-operative hospitalization follow-up and
outpatient care, corporate wellness, Lasix eye surgery, and within other coverages. On the other
hand, Britcay offer health insurance to self-employed consultants, early retirees with the local
basic health plan and overseas benefits. Also, it offers life insurance plans in regards to lifetime
financial planning such as mortgage protection, college fees and retirement/investment (Colonial
Group International, 2016). The investment plans range from ten to thirty-year terms with
different fixed payments (Colonial Group International, 2016).
Moreover, Cayman First Insurance Company was established in 1984 as Cayman General
Insurance Ltd. and is an organization that provides general insurance in the Cayman Islands.

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

11

(Cayman First, 2014) Some of the products they offer include residential, commercial, motor,
health, condominium, and contractors all risks. (Cayman First, 2014) Moreover, Cayman First
offers group and individual health insurance plans since 1999 (Cayman First, n.d.). Through their
network providers, it can allow the patient to access to over 560,000 health care providers in the
United Stated and worldwide. Also within the group health insurance, they offer, Group Life and
Accidental Death & Dismemberment, Group Short-Term Disability, and Group Long-Term
Disability (Cayman First, n.d.).
Cayman First Insurance Company Limited also offers marine insurance to the local
market (Cayman First, 2014). The policy coverage they offer is hull insurance and liability
insurance. Cayman First provides full coverage if the policyholder incurs a damage or complete
loss of their vessel due to an accident, theft, or perils such as fire (Cayman First, 2014).
Likewise, the policy covers for legal liability to third parties and passengers involved in the
accident (Cayman First, 2014). It also provides coverage for loss or damage of cargo while being
transported on the ship under the policy of the insurance (Cayman First, 2014).
Furthermore, since January 1st, 2004 the Cayman Islands National Insurance Company
(CINICO) has been providing their services and is a governmental-owned insurance company
(CINICO, 2011). CINICO was created after the collapse of the Governments Health Insurance
program with Caribbean Home Programme which insured all civil service at that time. The
Ministry of Health hired the company Mercer to conduct in-depth research and feasibility study
of a self-funded insurance program (CINICO, 2011). The program was aimed to assist the
Ministry to obtain reinsurance protection and secure claims services through different
organizations.

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

12

The mission of CINICO (2013) is to manage our stakeholders welfare by providing costeffective solutions and sustainable coverage. (pp. 6). Likewise, the purpose of CINICO is to
provide low-cost health care for government insured such as civil servants, pensioners, other
government entities, Seamen & Veterans and their dependents (CINICO, 2016). Aside from those
insured, low-income residents of the Cayman Islands and impaired health status or elderly are
also included as government insured (CINICO, 2016). Consequently, CINICO purpose is to meet
the low expense targets of the government by providing a premium discount (CINICO, 2011).
Furthermore, the insurance policy of the company are structure have the Cayman Islands Health
Services Authority (CIHSA) as the primary network provider (CINICO, 2011). For example, if a
member of CINICO needs medical health care, their treatment is held at CIHSA. Unless the
service is unavailable at CIHSA; then, care is taken to another complementary network of
CINICO. Moreover, CINICO provides management infrastructure, management team and
service providers with experience in managing risks related to health insurance plans to the
Cayman Islands Government (CINICO, 2011).
Furthermore, to provide low-cost health insurance, CINICO partner with different
organizations to administrate claims and have reinsurance coverage. The Third Party
Administrator and CBCA Administrator Inc. administrate local claims (CINICO, 2011). Then,
administration and case management services for overseas medical treatment are oversee by the
Care Management Network Inc. (CINICO, 2011). Consequently, the partnership with CMN
allows the insured to have accesses to an extensive network of medical facilities in the United
Stated and other countries at discount rates. On the other hand, the company has reinsurance
coverage through Munich Re (CINICO, 2013). The reinsurance coverage provides specific
excess loss reinsurance coverage on a per coverage person basis (CINICO, 2013). In other

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

13

words, the different organizations that are hired by CINICO allow for the company to offer low
premium rates and meet the financial goals of the government of the Cayman Islands.
Correspondingly, the health insurance products that CINICO offer are categorized as civil
servants & Pensioners, Seafarers and Veterans, SHIC Plan Silver Group, and SHIC Plan
Affordable Group (CINICO, 2016). For example, Seafarers and Veterans is a health care
coverage administered on behalf of the Ministry of Health for veterans and respective
dependents (CINICO, 2013). Then, the Standard Health Insurance Contract (SHIC) Plan which
covers for out-patient benefits such as regular doctor's visit, air ambulance for life threating
emergency, maternity care, insulin for Diabetics, mental health inpatient benefits, repatriation of
remains and in-patient benefits (CINICO, 2016). Likewise, CINICO pays 20% of incurred
medical expenses, but 80% up to KYD $400 and the insured member is responsible for KYD
$80.00 (CINICO, 2016). Overall, the health care provides protection to the insured against full
cost of health care and ensures healthcare assistance in case of a medical condition arises.
Likewise, there is Island Heritage Insurance Company who provides the motor, home,
strata and commercial insurance and has offered their services since 1996 in the Cayman Islands.
For example, the organization offers comprehensive and third party motor insurance coverage.
The third party coverage only offers the basic protection of legal liability with the limits of
$250,00 in respect of property damage, $10,000,000 in respects of death and bodily injury to any
individual and any one event. Whereas Comprehensive vehicle insurance provides additional
road assistance, new car replacement for the market value or the sum insured, and legal liability
in respect of bodily injury or property damage to a third party.
Beside motor insurance Island Heritage offers home, strata insurance, and commercial
insurance benefits. The home insurance protects the insured building and fixtures and fitting such

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

14

as patios, terrace, swimming pools, and others. Also, the sum insured must include allowances
for debris removal, demolishing and professional fees if the home requires full rebuilding.
Consequently, the insurance offers coverage for replacement cost at current value for all the
insured goods and values within their home. On the other hand, the strata insurance offers
additional comprehensive package coverage against hurricane and natural disaster, public
liability, and break-in damage. Then, at last, the insurance company offers commercial insurance
benefits such as asset protection, new acquisition, riot, strike and malicious damage with one
policy for multiple locations.
Pan-American Life Insurance Company of the Cayman Islands has been on the market
since 2012 to provide life, accident and health line products to customers. The organization
offers ordinary life and guaranteed protector life insurance products. The ordinary life is
designed to provide permanent insurance coverage to the individual and secure the financial
future of the family in the event of death. Likewise, upon death the beneficiary receives the sum
assured in addition to the dividends value accumulated upon the death period. Then, the
guaranteed protector safeguards cash accumulation in savings without payment dividend up to
the age of 70 years old. Furthermore, Pan-American offers group life and medical packages that
suit the needs of the population of the Cayman Islands. Overall, their portfolio offers innovative
products like travel care that reimburse medical expenses overseas.
Conversely, Sagicor Life of the Cayman Islands is a subsidiary of Sagicor Group Jamaica
and a part of the overall Parent Company Sagicor Financial Corporation that provides a range of
insurance products. Those products include life insurance, pension, group life and annuity
products. For example, they offer a single premium deferred annuity designed to provide a
retirement account for individuals. Also, provide investment services plans that insure high-yield

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

15

investments returns. Within the life insurance products, they have a broad variety of options such
as Super term, purple shield, and within others (Sagicor Cayman, 2016). The Super term is a
policy offer to individuals in the range of 18 to 70 years old (Sagicor Cayman, 2016). Then, the
purple shield offer five essential benefits: death, terminal illness, accidental dismemberment,
total and permanent disability due to accidents with a 75% and 125% payments (Sagicor
Cayman, 2016). All products cover different age ranges with benefits that fit the individual
needs. In addition to their product line, they also offer single premium deferred annuity and
single premium immediate annuity (Sagicor Cayman, 2016). The single premium annuity is a
long-term retirement account that grows investment and provides a steady income stream in
accordance with the term and form of the pension (Sagicor Cayman, 2016). On the other hand,
the single premium immediate annuity provides a series of periodic payments upon the Single
Premium is paid (Sagicor Cayman, 2016).
Subsequently, Saxon Motor & General Insurance Company Ltd. was created in January
2011, when it acquired MG Cayman, a motor insurer. The vision of Saxon is to strive to protect
all people in Cayman through smart, flexible and affordable insurance. (MG, 2011)The company
is driven by four core values: innovation, service, change, and reliability. Their products consist
of contents insurance, property insurance, motor vehicle insurance, general liabilities insurance
and workers compensation. (MG, 2011) Saxon is an organization known for continuously
forging the path of innovation for insurance companies in the Cayman Islands. They were the
first insurance company to introduce the Buy Online Feature, which allowed customers to
purchase car policies online. Throughout the years, Saxon has managed to introduce different
insurance policies, such as contents insurance, property insurance, motor vehicle insurance,
general liabilities insurance and workers compensation. Saxon primary goal is to provide

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

16

affordable insurance tailored to the customer needs through a remarkably efficient and organized
system.
At last, the Insurance Company of the West Indies (Cayman) Limited was created in 2006
to provide commercial, engineering, liability, marine, motor and residential insurance. For
example, the organization offer marine insurance to the general public in Cayman Islands (The
Insurance Company of the West Indies, 2016). ICWI provides over land and sea coverage to
ensure a smooth process to clients in potential risk of maritime perils and cargo loss or damage
(The Insurance Company of the West Indies, 2016). Simultaneously, the organization offers
motor insurance with comprehensive and third party coverage. Also, provides uninsured
motorists protection and offers alternative transportation for up to 21 days rental vehicle.
Captive Insurance
On the other hand, the Cayman Islands are recognized as an international financial center
and have become one of the worlds largest captive domiciles. A captive insurance company is
established by a parent firm to insured its loss exposures, reduce premiums cost, retain, manage
and control losses, and foremost insure the uninsurable (Rejda & McNamara, 2014). Likewise,
the legal framework is based on English Common Law, with the final court of appeal being the
Privy Council in London (Watt, O'Mahony, Gower, & Watler, 2015). Moreover, 151 entities
specialize in Workers Compensation, 152 first class business in Professional and General
Liability, and 246 on Hospital and Medical Malpractice Liability (Watt, O'Mahony, Gower, &
Watler, 2015). Likewise, a 90% of the insured risk the captive insurance companies assume are
from the organization in North America (Watt, O'Mahony, Gower, & Watler, 2015). For example,
541 captive insurance that specializes in liability and casualty and workmens compensation
insurance. Out of those captive insurances, there are major companies that excel in those areas

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

17

such as Marsh Management Services Cayman Ltd., Advantage International Management


Cayman Ltd., CSI International Underwriting (Cayman) Ltd., Aon Insurance Managers
(Cayman) Ltd, and Kensington Management Group Ltd.
Furthermore, Marsh Management Services Cayman Ltd. was established in 1998 as a
subsidiary of one the worlds largest captive manager organization Marsh (Marsh & McLennan
Companies, 2016). They provide captive solutions which include advice, implementation,
management and actuarial services that are tailored in accordance with the business models of
clients (Marsh & McLennan Companies, 2016). Likewise, a benchmark of this organization is
the Green Island Reinsurance Treaty, which facilitates the participation of captives in sharing
primary casualty or workers compensation loss (Marsh & McLennan Companies, 2016). The
treaty reduces the variability of loss costs and helps diversify a captive portfolio by the transfer
of a portion of the risk in exchange for assuming other participants risks (Marsh & McLennan
Companies, 2016).
Then, Advantage International Management (Cayman) Ltd. is a leading provider of
insurance in the Cayman Islands, who offer related services to business owners that seek
solutions for risk management (Captive International, n.d.). Through their subsidiary, Advantage
Management, offer risk management, financial planning, and estate planning. Furthermore, two
primary segments are Life Insurance and Business Insurance (Captive International, n.d.). They
offer casualty and liability insurance coverage to reduce the net cost for business and offer
consultations for structuring risk management (Captive International, n.d.). As well, since 1982
CSI International Underwriting (Cayman) Ltd. has been an insurance manager within the
Cayman Islands (CSI International Underwriting (Cayman) Ltd., n.d.). Some of the product lines

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

18

they offer are workers compensation, product liability and professional liability (CSI
International Underwriting (Cayman) Ltd., n.d.).
Also, Aon Cayman is part of one of the largest insurance brokers that provide a broad
range of product lines. (Aon Risk Solution Cayman Ltd., 2016) Within those product lines, they
offer workers compensation for the death or injury of employees that arise in their course of
employment (Aon Risk Solution Cayman Ltd., 2016). They also offer employers liability that
protects the employer against litigations resulting from employees injury or diseases due to
deemed result of negligence by the employer (Aon Risk Solution Cayman Ltd., 2016). Likewise,
they offer public and event liability to protect the business from claimants alleging bodily injury
or property damage (Aon Risk Solution Cayman Ltd., 2016).
As well, since 1999 Kensington Management Group Ltd. has been providing their
services and expertise in managing all types of captive insurance companies (Kensington
Management Group, 2015). These organizations provide a broad range of coverages such as
workers compensation, hospital liability, general liability, product liability and within other
product lines (Kensington Management Group, 2015). Their portfolio is compacted of different
single parent and member-owned group captives and with a 10% volume of premiums written in
the Cayman Islands (Kensington Management Group, 2015).
Conclusion
In conclusion, within the Cayman Islands, the insurance sectors is regulated by the
Cayman Islands Monetary Authorities through the enforcement of the Insurance Law 2010. The
major insurance sectors are health care, pension, and captive. Furthermore, the three areas are
stipulated by laws and regulations of the government in the Cayman Islands to protect the

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

19

interest of the general public. Therefore, the different laws and regulations, are stipulated to
ensure that local insurers remain compliance to enforce practice within the Cayman Islands.
Thus, the Cayman Islands have been a jurisdiction center for international insurance and local
insurer. For example, the Insurance Law 2010 outlines the license requirements for the different
categories of insurance businesses. In other words, the Insurance Law 2010 is meant to set the
process and standards for organizations to follow in order to become a licensed insurance
business within the Cayman Islands. Conversely, the Health Insurance Law and Regulation
stipulated all residents within the island must have a health insurance plan in force to promote
affordable health care. In the same manner, the law mandates that 50% of the premium is paid by
the employer and the remaining 50% by the employee.
Furthermore, the Cayman Islands insurance industry represents a large part of the finance
sector. Four different organizations regulate insurance related businesses. The first is the Cayman
Islands Monetary Authority which is the general regulator who works along the hand of the
Insurance Managers Association and Cayman Islands Insurance Association to ensure a financial
resilient and protection of the public interest. Then, the Health Insurance Commission is the
regulator of the health insurance companies and ensures they comply with standards.
Furthermore, the main purpose of the Health Insurance Commission is to assist the public with
resolutions on complaints related to the health insurance provision (Department of Health
Regulatory Services, 2016). Likewise, the premiums rates are assessed and monitored by the
Commission and advise the Minister on any amendments to the Health Insurance Law and
Regulation. On the other hand, the Pension Law (Amendment) Law, mandates for employers to
have in place pension plans for their employees after working six months within the
organization. The purpose of the Pension Law is to ensure that when individuals reach the age of

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

20

60 to 65 they have sufficient funds to retire from the workforce without lowering their living
standards. Consequently, the Cayman Islands pension system is divided into private and public
sectors which are governed by separate legislations. For instance, the public sector is
administered by the Public Service Pension Board. Overall, the purpose of laws and regulations
is to ensure that business who carry out practice as insurance is accordingly supervised to ensure
the public interest and shareholders.
According to CIMA, there are over 864 insurance related licensees, who are under the
supervision of the Insurance Supervision Division of Cayman Islands Monetary Authority
(CIMA, 2016). Consequently, those numbers are distributed among the different categories of
license insurance entities. There are Class A Local Insurance entities that are composed of 9
insurance companies, who offer the different type of insurance coverages. All the local insurance
companies offer domestic coverages to the public in accordance with the kind of loss incurred.
For example, motor insurance offers protection through comprehensive or third party coverage.
Moreover, insurance companies like Island Heritage, Saxon Insurance, and the Insurance
Company of the West Indies are specialized on motor insurance products. Subsequently, the
same insurance companies offer property insurance to the residents of the Cayman Islands in the
potential losses incurred by perils like hurricanes and natural disasters.
Then, the marine and aviation insurance are coverages that protect the policyholder from
unknown potential risk. For example, two locally incorporated business that offer marine
insurance are Cayman First Insurance Company Limited, and The Insurance Company of the
West Indies (Cayman) Limited (Cayman Islands Monetary Authority, 2016). The insurance
coverages prevent for losses to affect the financial stability of an individual, company and
business owners. Today, lawsuits are common therefore companies must be prepared and

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

21

protected to ensure economic stability in case of a significant loss happens without any
expectation.
Another form of insurance coverage is annuity insurance which provides a lifetime
income to a person who outlives their savings; whereas, life insurance provides financial
protection to the loved ones upon the unexpected death of the insurance policyholder.
Furthermore, a healthy individual who has a probability of outliving his or her saving account of
their retirement plan, the option of purchasing an annuity contract would be taken into
consideration. Consequently, insurance companies within the Cayman Islands are British
Caymanian Insurance Company Ltd., Pan-American Life Insurance Company of the Cayman
Islands, and Sagicor Life of the Cayman Islands Ltd. These insurance companies offer a broad
range of insurance policies such as life and annuity insurance which fits the needs of an
individual. As well, the insurance industry assesses liability through the usage of statistical
methodologies. The insurance industry offers product lines such as life insurance and annuities to
provide financial protection against potential perils that can affect the financial stability of the
general public.
Simultaneously, all the insurance organization offers health care coverages that are
modified by the needs of the individual or group. For example, the Cayman Islands National
Insurance Company is wholly own government organization which aims to provide healthcare to
residents of the Cayman Islands. One of their major goals is to provide health insurance coverage
at low premium rates with the assessment of different network connections. Likewise, the impact
CINICO has on the Cayman Islands economy is to provide health insurance plans to civil
servants, seafarers and veterans, and residents deemed as indigent by the Department of Children
and Family Service. Consequently, the low expenses target of the government is met through

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

22

discount rate the premium are offered. Conversely, regardless of offering low premium rates, the
organization thrives to maintain emphasize on the insureds satisfaction. Likewise, they offer
innovative products and services to gear towards adding value and protection against financial
risk of the corporation.
At last, in the Cayman Islands there are 723 captive insurance organization who offer a
broad range of product lines to self-protect from the risk that is not covered by regular insurance
companies. Furthermore, a captive insurance compiles a portfolio for business owners to insure
the uninsurable by regular insurance companies. For example, approximately 34% of firms
insure Medical Malpractice liability and followed by 21% of firms assume the risk of workers
compensation. The underwriting assumption of risk captive insurance is overseen by professional
risk managers, who assess it by the customer needs and at low rate premium prices.

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

23

References
Aon Risk Solution (Cayman) Ltd. (2016). Public Liability [Website]. Retrieved from:
http://www.aoncayman.com/Pages/Public-Liability.aspx
Aviation Insurance. (2016). Aviation Insurance [Website]. Retrieved from Aviation Insurance:
http://avioninsurance.com/aviation-insurance-types/
BAF Insurance Company. (2010). BAF Insurance Company (Cayman) Limited [Website].
Retrieved from http://cayman.mybafsolutions.com/
Boxall, J. & Grover, C. (2016). The Resident. Cayman Islands: Acorn Publishing Co Ltd.
Captive International. (n.d.). Advantage International Management (Cayman) Ltd [Website].
Retrieved from http://www.captiveinternational.com/company/advantage-internationalmanagement
Cayman First. (2014). Cayman First [Website]. Retrieved from
https://www.caymanfirst.com/about-cayman-first-insurance/
Cayman Islands Insurance Association. (2004). CIIA [Website]. Retrieved from http://ciia.ky/
Cayman Islands Monetary Authority. (2016). Cayman Islands Monetary Authority [Website].
Retrieved from http://www.cimoney.com.ky/
Cayman Islands Monetary Authority. (2016, October 14). CIMA [Website]. Retrieved from
http://www.cimoney.com.ky/regulated_sectors/reg_sec_ra.aspx?id=242
Cayman Islands Monetary Authority. (2016). Insurance Statistic and Regulated Entities. CIMA.
Retrieved from http://www.cimoney.com.ky/regulated_sectors/reg_sec_ra.aspx?id=242

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

24

Cayman Islands Monetary Authority. (2016). List of Insurance Companies by Licence Type. List
of Insurance Companies by Licence Type. Grand Cayman, Georgetown, Cayman Islands:
Cayman Islands Monetary Authority. Retrieved from
http://www.cimoney.com.ky/regulated_sectors/reg_sec_ra.aspx?id=242
Cayman Islands National Insurance Company Ltd. (2016). CINICO [Website]. Retrieved from
https://www.cinico.ky/#b
Cayman Islands National Insurance Company. (2011). 2010/2011 Annual Report. CINICO.
Retrieved from: http://www.legislativeassembly.ky/portal/pls/portal/docs/1/9852130.PDF
Cayman Islands National Insurance Company. (2014). Publication Scheme 2015. CINICO.
https://www.cinico.ky/upimages/commonfile/CINICO_Publication_Scheme_December_
24_2014.pdf
Colonial Group International. (2016). Colonial Group International [Website]. Retrieved from
https://cayman.cgigroup.com/en/
CSI International Underwriting (Cayman) Ltd. (n.d.). About Us [Website]. Retrieved from
http://www.csi.ky/about-us
CINICO. (2013). Strategic Review and Strategic Plan 2013-2018. Grand Cayman Cayman
Islands. Retrieved from https://www.cinico.ky/strategic-plan#b
DeSimone, R. D. (1995). Navigating the marine insurance market. Risk Management, 42(12),
44+. Retrieved from http://go.galegroup.com.ezp-02.lirn.net/ps/i.do?
p=AONE&sw=w&u=lirn65641&v=2.1&it=r&id=GALE
%7CA17850746&asid=1aef624abbe9a29ce20af581a963d808

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS


Departhment of Health Regulatory Services. (2016). Department of Health Regulatory Service
[Website]. Retrieved from
http://www.dhrs.gov.ky/portal/page/portal/hrshome/hic/approved
Health Insurance. Gazette No. 21. CC. (2013).
Insurance Law 2010. Gazette No. 21. CC. (2010)
Insurance Managers Association of Cayman. (n.d.). About: IMAC [Website]. Retrieved from
http://www.imac.ky/about.aspx
Island Heritage. (2012). Island Heritage [Website]. Retrieved from
http://www.islandheritageinsurance.com/index
Kensington Management Group. (2015). Kensington Management Group [Website]. Retrieved
from http://kensingtonmanagement.ky/
Lloyds of London. (2016). Lloyd's [Website]. Retrieved from https://www.lloyds.com/themarket/tools-and-resources/tools-e-services/risk-locator/risk-location-examples
Marsh & McLennan Companies. (2016). Marsh Services [Website]. Retrieved from
https://www.marsh.com/us/services/captive-insurance-solutions.html
Nunez, J. (2016). Presentation to ICCI Students on Careers in the Insurance and the Banking
Service Industry. Archives of the International College of the Cayman Islands.
Pan-American Life Insurance Group. (n.d.) Palig [Website]. Retrieved from
https://www.palig.com/caribbean/cayman-islands
Pensum Ltd. (2006). Pensum Offshore [Website]. Retrieved from
http://www.pensumoffshore.com/insurance-types.aspx

25

THE INSURANCE INDUSTRY IN THE CAYMAN ISLANDS

26

Public Service Pensions Board. (n.d.). Public Service Pensions Board [Website]. Retrieved from
http://www.pspb.gov.ky/portal/page/portal/pebhome/aboutus
Saxon Insurance. (2011). Saxon Smart Insurance [Website]. Retrieved from
http://www.saxonmg.ky/about
Sagicor Cayman. (2016). Sagicor Cayman [Website]. Retrieved from
http://www.sagicorcayman.com/personal/insurance/retirement
The Insurance Company of the West Indies. (2016). ICWI [Website]. Retrieved from
http://icwi.com/cayman/residential/a-plus-home-cover/
The National Pensions (Amendment) Law, 2016 (Law 17 of 2016). Gazzete No. 45. CC. (2016).
Thowseaf, S., & Millath, A. (2015). Marine insruance-LEgal Aspect in India. Alagappa Institute
of management, Alagappa University, Karaikudi, 1-10. Retrieved from
https://www.academia.edu/28523531/MARINE_INSURANCELEGAL_ASPECT_IN_INDIA
Rejda, G. E., & McNamara, M. J. (2014). Principles of Risk Management and Insurance. New
Jersey: Pearson Education, Inc.
Watt, D., O'Mahony, K., Gower, D., & Watler, A. (2015). Captive Insurance in the Cayman
Islands. Grand Cayman, Georgetown, Cayman Islands: KPMG. Retrieved from
https://www.kpmg.com/KY/en/industry/Documents/Captive
%20publication_2015_pdf_2.3MB.pdf
Woodward, B. H. (n.d.). Aviation Insurance. Aviation Insurance. Retrieved from CASACT:
https://www.casact.org/pubs/proceed/proceed38/38081.pdf