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Reports that the Cayman Islands
Monetary Authority (CIMA) intends to develop a commercial
reinsurance market to rival
Bermuda’s come as welcome
news to the domicile’s captive industry.
Legislators are currently
planning an expansion of the domicile’s insurance laws
following recommendations made by an appointed working group.
One of the key proposed changes
is to create separate laws for commercial insurers and
reinsurers. The existing insurance law, which has not been
amended for nearly 30 years, does not specify between the two
types of company.
CIMA, led by outgoing insurance
supervisor Mary-Lou Gallegos, hopes that creating specific
reinsurance laws will encourage an influx of reinsurers to its
domicile and stimulate the growth of an independent commercial
reinsurance market.
Competing domicile
Bermuda boasts a reinsurance
market worth more than US$100bn in assets that includes seven
of the world’s top 20 reinsurers, the largest representation
by any single domicile, according to the Association of
Bermuda Insurers and Reinsurers.
According to
Dan MacLean, managing director of Aon Insurance Managers
(Cayman) and chairman of the Insurance Managers Association of
Cayman, increased reinsurance capacity would benefit Cayman’s
captives.
“Bermuda
has the benefit of currently being considered a one-stop shop.
Many of our Cayman captives schedule meetings periodically in
Bermuda so they can coordinate their meetings with the
Bermuda reinsurance market.
I trust if Cayman began to develop a commercial reinsurance
market that captive owners and their brokers would use the
opportunity to visit the new Cayman reinsurance markets,” he
said.
Cayman licensed commercial
reinsurer Greenlight Re in 2004, a privately-held
New York company
worth US$250m.
“We are certainly excited to
have companies like Greenlight Re set up in Cayman, and the
new insurance legislation currently being adopted will allow
commercial reinsurers to licence in Cayman,” said David Self,
president of Cayman captive management firm Monkton Insurance
Services.
“I believe that this is a
milestone for Cayman as we continue to develop the domicile as
an all-round offshore insurance centre to compete head to head
with
Bermuda.”
Cayman is already the second
most popular captive domicile in the world behind
Bermuda, with 726 active
captives currently licensed, according to the Insurance
Managers Association of Cayman.
The domicile’s captive industry
writes around US$6.5bn premium annually, and boasts total
assets under management of around US$26bn. |
