The enactment of the Insurance Act, 2010 (the Insurance Act) was a result of a public and private sector collaboration to improve the regulation of insurance business in the Cayman Islands, enhance protection for domestic consumers and open new frontiers for international business development.
The main provisions of the Insurance Act included, what were at the time, two new categories of insurer licences—Class C (special purpose vehicles for insurance-linked securities (ILS)) and Class D (large commercial reinsurers). Since 2010, there have been further developments to the Insurance Act, and in March 2013, Cayman introduced incorporated portfolio legislation for insurers structured as Segregated Portfolio Companies (SPCs). The amendment in 2013 conferred several advantages, such as allowing a portfolio insurance company (PIC) the flexibility to transition to a stand‐alone insurance company, unlike an unincorporated cell. The Insurance (PIC) Regulations 2015 were brought into force in January 2015, along with the related section of the Insurance (Amendment) Act, 2013. These regulations enhance the statutory insurance framework, providing additional alternatives to risk management by providing insurers incorporated as SPCs more flexibility.
In June 2022, the Insurance Act was amended by the Insurance (Amendment) Act, so as to allow capital redemption contracts or funding agreements, i.e. contracts under which an insurer may (a) receive and accumulate sums of money; and (b) pay a sum or sums of money or render money’s worth, on dates and in amounts that are not contingent on human life or against risks of the person insured. In July 2024 and January 2025 respectively, further amendments were made to the Insurance Act which, amongst other things, included references to the beneficial ownership regime and clarified certain points regarding fees payable by PICs.
