Definition of Insurance Business

According to Section 2 of the Insurance Act, "insurance business" is defined as:

"the business of accepting risks by effecting or carrying out contracts of insurance, whether directly or indirectly, and includes run-off business, including the settlement of claims."

Regulation of Insurance Business

The Insurance Act grants Cayman Monetary Regulatory Authority International the authority to regulate the insurance industry in the Cayman Islands. This encompasses licensing, ongoing supervision, and enforcement. The day-to-day regulatory oversight of the sector is handled by the Cmrai Insurance Supervision Division.

Licence Categories

Under the Insurance Act, Cmrai may issue the following types of insurance licences:

• Class A Insurer's Licence - Allows a local or external insurer to conduct domestic insurance business or limited reinsurance business as approved by the Authority.
• Class B Insurer's Licence - Allows an exempted insurer to engage in insurance business other than domestic business, with varying percentages of net premiums originating from the insurer’s related business.
• Class C Insurer's Licence - Allows an exempted insurer to conduct insurance business involving reinsurance arrangements, where the insurance obligations are collateralized by the insurer’s funding sources, including bonds or other approved financial instruments.
• Class D Insurer's Licence - Permits an insurer to conduct reinsurance business and other approved business activities.
• Insurance Agent's Licence - Authorizes an individual (who is not an insurer) to solicit domestic business on behalf of one general insurer and one long-term insurer.
• Insurance Broker's Licence - Allows an individual to arrange or procure insurance or reinsurance contracts on behalf of policyholders, either directly or through representatives.
• Insurance Manager's Licence - Allows a company to provide insurance expertise to Class B or Class C insurers.

Standards of Regulation

Cmrai regulates the insurance sector in accordance with:

• The Insurance Act and its regulations;
• The rules, guidance, policies, and procedures issued by Cmrai (see Insurance Regulatory Measures).

Status of the Cayman Islands Insurance Industry

Since the Insurance Act was enacted in 1979, the Cayman Islands has evolved into a major hub for international insurance business. The Cayman Islands is the second-largest domicile for captives and is the global leader for healthcare captives.

Healthcare is the leading class of business among Cayman-domiciled captives, followed by workers’ compensation. The Cayman Islands' captive insurance industry primarily comprises companies from North America, with the Caribbean and Latin America also being significant sources.

For the latest statistics and data on the Cayman Islands insurance industry, please visit the Insurance Statistics section of this site.