Archive for March 20th, 2009

CINICO reveals losses to Legislative Assembly

CINICO reveals losses to Legislative Assembly

| 20/03/2009 | 1 Comment

(CNS): CINICO continues to run at a loss. However, at least at least the people of the Cayman Islands know this is the case for the government owned insurance company since it is one of the first government entities to complete its 2007/08 annual report. Many others have still to file their reports for 2007/08 and some have yet to complete for previous financial years as well. Minister for Health and Human Services Anthony Eden laid the CINICO report on the table of the Legislative Assembly on Thursday morning, saying it had reduced its operating losses from $6.5 million to $200,000 due to a capital injection from government.

CINICO (the Cayman Islands National Insurance Company) is a wholly government-owned insurance company which was formed to provide health insurance coverage to civil servants (employees and pensioners) and other residents of the Cayman Islands who historically have had difficulty obtaining coverage through their employer or the private insurance market. As a result it is difficult for the company to collect premiums that match its outlay. However, the minister said that an industry indicator of how viable an insurance firm is relates to the operating expense to payment ratio, and he said CINICO exceeds the industry benchmark of 15% as its is only 11%.

The minister explained that, as a class A insurance firm, it has to be compliant with CIMA regulations, but was not because of the significant shortfall in premium collection — hence the need for a significant capital injection from the shareholder, which is government. “It is now fully compliant,” he added. “Despite the difficulties CINICO is committed to addressing the historical negative performance.”

Although this government company has revealed its continuing losses in its report, at least the people of the Cayman Islands can now read how much CINICO is costing them. Most other government entities have not yet provided their 2007/08 accounts to the LA.

Despite the fact that many government entities remain significantly delinquent in their account reporting, as first revealed in July of 2008 by Auditor General Dan Duguay’s report, State of Financial Accountability reporting, CNS can confirm that the Public Accounts Committee will not meet to question financial officers over this issue before the Legislative Assembly is dissolved on Tuesday.

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International hunt for worm

International hunt for worm

| 20/03/2009 | 0 Comments

(New York Times): An extraordinary behind-the-scenes struggle is taking place between computer security groups around the world and the brazen author of a malicious software program called Conficker. The program grabbed global attention when it began spreading late last year and quickly infected millions of computers with software code that is intended to lash together the infected machines it controls into a powerful computer known as a botnet. Since then, the program’s author has repeatedly updated its software in a cat-and-mouse game being fought with an informal international alliance of computer security firms and a network governance group known as the Internet Corporation for Assigned Names and Numbers.

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Tax deals too little too late, says Bush

Tax deals too little too late, says Bush

| 20/03/2009 | 23 Comments

(CNS): Although government now has some 15 Tax Information Exchange deals in place, the leader of the opposition has questioned why so few have been signed in the last four years. Yesterday, government announced it had completed agreements with another seven European countries, including Germany, to add to the existing deals signed with the Nordic group and the US. This means Cayman has now met the OECD standard, which states that 12 deals would qualify a country as transparent.

McKeeva Bush said Cayman made an advanced commitment to the OECD several years ago on tax matters but that he has seen no evidence that the government had implemented any of the measures it promised.

"The BVI and other competing jurisdictions have signed several Tax Information Exchange Agreements. And yet the PPM has sat idly by for years as our competitors come good on their various international commitments, exposing Cayman to the risk of being blacklisted again. They are only now trying to play catch-up in preparation for the general elections. But the reason that the pressure is so severe on this country in relation to financial services matters is directly because the government has done next to nothing over the past 4 years,” he said in a statement. 

Bush said that he had written to Financial Secretary Ken Jefferson (whose portfolio, rather than Alden McLaughlin’s ministry, as is sometimes perceived, is actually in charge of the Financial Services Sector) expressing his concern over the lack of progress on the Cayman Islands commitments to the OECD.

He has also accused the government of attempts to ‘step into the limelight’ on what he described as a last-minute scramble on the recent initiative taken by the Cayman Islands Financial Services Association to address the looming international challenges to the financial services industry.

“I have written to the government asking for clarification on what has been done and to better understand why we are now in this position,” Bush added.  “The government campaigned on the basis of accountability, and they should now explain to the public why they have waited until the very last minute to address these very important matters. We are talking about an industry that employs thousands of Caymanians and generates at least 30 percent of all government revenues. This neglect is shameful.”

The leader of the opposition praised the private sector move to lead the country’s international promotional and lobbying efforts and said nothing of its delay in making a concerted effort to respond to the crisis. “I am very pleased to see the private sector taking action at a time when the international challenges to a key economic sector are so severe. But clearly the private sector was forced to act in such an urgent manner because the industry has been neglected by the PPM administration for years,” Bush added.

He said that while the PPM has rushed to push through a number of bills recently relating to the financial services industry, the government has been heavily criticised in many quarters of the sector and at times by the local media for its handling of the international challenges to the industry.  Representatives within the financial services sector argued at a Chamber of Commerce luncheon earlier this year that lobbyists for the financial services sector either were not in key places, such as Washington or London, or they were not effective. 

“During my term, we felt that our financial services industry needed official support on the ground in those key locations.  Our role as government was to be a facilitator. If the industry felt that Asia, for example, was a key market opportunity, it became our duty to ask what how we could better facilitate their efforts.  That is how we operated. Over the past four years, we have witnessed a government that has ignored the financial services industry until the eleventh hour.”

Bush says he adopted an aggressive international relations and lobbying strategy during his previous term as leader of government business and he said a business cannot run properly without promotion. “So how can you take that approach with an entire industry that supports the livelihoods of Caymanians?” he asked. “The government must be held accountable for allowing such a poor state of affairs in our financial services industry,” said Bush. 

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Kill a polar bear for $35,000

Kill a polar bear for $35,000

| 20/03/2009 | 0 Comments

(The Independent): Boyd Warner treasures the memory of killing his first polar bear. It was 2003. For days he had stalked his prey on the frozen wastelands north of Pond Inlet, one of Canada’s most isolated Inuit communities deep inside the Arctic Circle. His dog team picked up the scent of an eight-foot adult male and they hurtled over the ice: the hunt was on. "It was one of those beautiful Arctic days," recalled Mr Warner. "We’d had about 14 hours of sunlight and were completely surrounded by nature."

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Cayman link to fund collapse

Cayman link to fund collapse

| 20/03/2009 | 0 Comments

(Financial Times): A $639m (£440m) London hedge fund collapsed on Thursday night after the discovery that the main asset of Weavering Capital’s flagship fund was a $637m derivatives trade with an offshore company controlled by the fund’s founder and chief executive. Weavering Capital called in administrators on Thursday and its Weavering Macro Fixed Income fund was put into liquidation in the Cayman Islands, after claims the trade could not be paid. Weavering froze the fund a week ago after discovering the position and calling in PwC to investigate.

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