Dependability & resilience shine through

Rolling back time to March 2020, a pandemic was emerging upon the world and most governments were determining what measures to take in order to protect their citizens. Cayman was not alone and perhaps one of its most stringent was when it made the bold and decisive decision to close its borders to non-residents, closing its airport to overseas airlines and the port to cruise ships, which turned out to be for an extended period.

During this time, residents lived in a veritable bubble, sheltered from the outside world. However, Caymanian residents were able to go about their daily Island lives relatively unencumbered. If one had to travel, whether it be for business reasons, for returning their children to boarding schools and universities overseas, or for unexpected emergencies, Cayman Airways and the Cayman Islands government were able to accommodate such needs. However, waiting for authorisation to do so, as well as the uncertainty around confirming a seat on a repatriation flight, could be a little unsettling.

During the early days of the COVID-19 pandemic, one would have to endure a period of mandatory quarantine at a government selected facility for 14 full days upon arriving back on the Island and undergo PCR testing on the day of arrival and again at the end of the quarantine period. Although self-isolation eventually became an option for a lesser period of time, where the returning traveller was provided a dedicated mobile GPS device to be checked upon, the PCR testing process was principally the same.

To Caymanians these measures may have felt limiting, with Cayman not opening up until September 2021 on a limited basis for visitors due to targeting an on-Island vaccination rate of 80 percent. In retrospect, this decisive approach possibly saved many lives during the early stages of the pandemic, given the Island’s inherently limited healthcare infrastructure and considering that to date, Cayman has had 29 deaths that are listed as caused by COVID-19. This figure is significantly less than a sister British Overseas Territory of similar population, which has experienced 148 COVID-19 related deaths for the same period of time (count as of August 31, 2022).

During the period when Cayman was not open to non-resident visitors, business life continued almost uninterrupted. Videoconferences became the routine medium of communication and interaction and the Cayman Islands Monetary Authority (CIMA) was virtually unaffected. It was readily available to assist with matters ranging from, but not limited to, new incorporation applications, business plan changes, director and officer approvals, classification changes, audit extensions and letters of good standing. All were accommodated without disruption. The Cayman Immigration Department continued processing work permit applications during this time which facilitated our expansion of personnel, thereby ensuring first-in-class service was provided to our clients from within the Islands.

Cayman’s growth as a captive insurance jurisdiction from the start of the pandemic through the present day is a testament to the fact that the Cayman Islands is a dependable domicile for international insurance business, and one which boasts having a sensible, client-centric regulatory regime.

Captive owners can take comfort in choosing Cayman as the domicile for their company due to the cohesive relationship between the regulator and the insurance managers, as well as the complement of industry experienced service providers including auditors, bankers, and lawyers who possess world-class knowledge and experience, making Cayman a best-in-class place to do business.

Economic substance

An example of the Cayman Islands government’s sensible approach is the recent implementation of the Department for International Tax Cooperation (DITC). With the issuance of the DITC’s Guidance on Economic Substance, its Guidance Notes specifically recognise the role of the insurance manager as the representative on behalf of class B insurers (ie, captives), class C ILS insurers/reinsurers, and portfolio insurance companies (PICs).

The PIC legislation is a unique and innovative approach where Cayman provides the owners of a segregated portfolio company (SPC) via a segregated portfolio account (cell) an option to establish a PIC. Once registered with CIMA, the PIC may carry on insurance business without requiring a separate insurance licence. The PIC can enter into contracts with other parties and being a legal entity, it may establish its own separate board of directors who may be different from the SPC’s board which otherwise could facilitate a possible conflict of interest between the SPC and the PIC.

Welcome to the conference

From November 29 through December 1, 2022, Cayman will host its first Captive Conference since December 2019. In prior years, the Insurance Managers Association of Cayman has boasted of the number of registrants being more than 1,400, making it the world’s most-attended captive conference. This year’s conference is on track to be another exceptionally well attended event, with perhaps limited airline seat availability being the cause for not exceeding prior years’ attendance.

At Beecher Carlson Cayman we look forward to the conference this year, with an agenda that will cover timely and relevant topics ranging from healthcare and group captives—for both of which Cayman is a leading domicile for licensing—as well as ILS, reinsurance solutions, and ground-breaking topics such as blockchain, cyber insurance, and crisis management.

We are enthusiastic about seeing our clients, colleagues, other service providers and friends at the Cayman conference. With fabulous networking opportunities as well as an agenda replete with relevant and impactful topics, this year’s conference sets Cayman apart as a leading insurance domicile that shines through with its proven resilience and dependability.