Modernising Regulatory Framework
Published 8th October 2010, 5:15pm
Insurance Law, 2010, Modernises Regulatory Framework
George Town, Grand Cayman – The Insurance Law, 2010, which was recently passed in the Legislative Assembly, is a collaboration of public/private sector efforts to improve the regulation of insurance business and enhance protection for domestic consumers.
Coordinating the legislative process on the public sector side, Deputy Chief Officer in the Ministry of Finance, Samuel Rose, noted, “This law encompasses several recommendations by international standard setting bodies as well as from the Cayman Islands insurance industry representatives. It mandates an effective corporate governance system by strengthening existing legislation and opening up new frontiers of business development.”
The main new provisions of the law include two new categories of insurer licences – class C (Special Purpose Vehicles) and Class D (Reinsurers); whistle-blowing provisions; domestic policyholder protections; and increased penalties and powers by the regulator.
The Cayman Islands insurance industry will benefit in several ways from the updated legislation. President of the Cayman Islands Insurance Association, Garth McDonald, observed, “The Cayman Islands Insurance Association fully supports the strengthening and modernization of the Insurance Law. As insurance is a key sector of our economy it is critical to have strong and clear legislation which is in step with international best practices. We look forward to continuing to work with the Cayman Islands Monetary Authority and the Ministry of Finance on the implementation of the new law.”
In addition, financial service providers are also pleased that the law covers recommendations contained in the International Monetary Fund’s 2005 and 2009 assessments of Cayman and is aligned with the prevailing international standards. Audits Partner for KPMG, John Ferrari, explained what this means to Cayman from a business development standpoint: “This modernized legislation paves the way for our local financial services industry to build on the islands’ existing reputation as a dynamic place to do business.”
“By bringing clarity to a number of key issues - particularly with reference to the regulatory requirements for international businesses - we are now well-placed to be able to meet market demand for an increasingly diverse suite of reinsurance products, such as Insurance Linked Securities. Personally, I am thrilled at the passage of this legislation as it represents tremendous opportunity and an enormous step forward for the islands,” Mr. Ferrari added.
From a regulatory perspective, increased enforcement powers allow the Cayman Islands Monetary Authority to impose certain conditions regarding decisions made by a licensee, hence streamlining the reporting and disclosure processes. This will in turn reinforce Cayman’s international standing and facilitate the entry of reinsurance entities, adding a new dimension to the industry.
Cayman Islands Premier and Minister of Finance, the Honourable McKeeva Bush, acknowledged key stakeholder groups including the Cayman Islands Insurance Association, Insurance Managers Association of Cayman, Cayman Islands Society of Professional Accountants, Cayman Islands Law Society, Cayman Islands Monetary Authority, the Portfolio of Legal Affairs and the Ministry of Finance for their contributions to this process and for demonstrating their commitment to protecting this vital sector within the Cayman Islands financial services industry.
For more information, please contact the Financial Services Secretariat at (345) 945-5819 or via email at firstname.lastname@example.org.