The Cayman Islands Insurance Law, 2010 (“New Insurance Law”) came into effect on November 1, 2012.  See IMAC Briefing November 2, 2012.

The New Insurance Law includes a number of significant changes and improvements including:

provides for the development and suitable regulation of the reinsurance business, including the provision of two new classes of insurance licence;
- Class C – in relation to the provision of reinsurance arrangements financed through the issuance of cat bonds and similar instruments; and,
- Class D – in respect of the carrying on of reinsurance business;

abolishes the distinction between unrestricted and restricted Class B licences, instead providing for three new sub-classes of Class B licence for non-domestic insurers, based on the percentage of net premiums originating from the insurer’s related business;

tightens the definition of the carrying on of “insurance business”, in particular removing references to contingent contracts for money;

establishes more comprehensive annual return reporting requirements for licensed insurers, agents, managers or brokers;

regulates transfers or the amalgamation of long-term business between licensed insurers, including requiring the approval of the Cayman Islands Monetary Authority (“CIMA”);

provides for the settlement of disputes in relation to contracts of domestic insurance by way of arbitration, even in circumstances where there is no arbitration agreement in place; and

clarifies and significantly strengthens the penalties for non-compliance with the law, in order to provide a real and effective deterrent to the carrying on of insurance business without a licence, or in contravention of the terms of the relevant licence or of the law.

These changes are made in conjunction with substantial amendments to the Cayman Islands Immigration Law in recent days which are intended to incentivise reinsurers and fund administrators to relocate to, and establish a substantial physical presence in, the Cayman Islands.These amendments include the availability of ten-year work permits for executives and managers in the reinsurance industry and free work permits for various categories of administrative staff for their first five years of residence in the Islands. In addition, Permanent Residence with the Right to Work is now available to approved persons who make a substantial investment in a home or other developed real estate. Taken together with the other benefits of life and the conduct of business in the Cayman Islands, substantial growth in the reinsurance sector in Cayman is anticipated.

The accompanying regulations which have been the subject of a consultation process are expected to be enacted passed by Cabinet this week.

See THE IMMIGRATION LAW (2011 REVISION) THE IMMIGRATION (AMENDMENT) (NO. 3) REGULATIONS, 2012  at