CIMA helps shape guidelines for world’s captives
(CNS): Cayman’s financial services regulator Cayman Islands Monetary Authority (CIMA) recently contributed to the creation of a new set of best practice guidelines for the captive insurance industry worldwide. Captive Best Practices Guidelines Volume 2-Utilizing Service Providers, was recently released by the Captive Insurance Companies Association (CICA), a multi-jurisdictional grouping of owners, administrators and managers of captive insurance companies or risk retention groups, and their service providers. The volume outlines what captive owners and regulators should expect from captive managers, actuaries, consultants, auditors, and attorneys.
It covers principles that service providers should follow during the prefeasibility, feasibility and formation stages of a captive, as well as during the company’s life and when the company is being closed. It also gives guidance on how owners should measure service providers’ performance.
“We volunteered to be part of the development of the guidelines because we agreed with CICA that the initiative was important in the process of continuous improvement for the captive industry globally,” said CIMA’s managing director Cindy Scotland. “I believe that if captives take responsibility for putting the principles into practice it lifts the standard of the entire industry and makes regulators’ jobs easier.”
The guidelines were developed through advisory groups representing owners, regulators, and service providers. CIMA, was represented by Gordon Rowell one of eight jurisdictional supervisory bodies in the group regulators from Bermuda, Guernsey, and the US states of District of Columbia, Kentucky, Montana, South Carolina, and Vermont.
Although regulators are not members of the association, CICA draws on their input and perspectives in carrying out its work. Rowell said this set of guidelines was the result of a careful consultative process:
“The starting point was the captive owner and regulator groups recommending best practices and then the service provider groups considering these and giving their responses and input, leading to amendments and refinements. There were several rounds of this before the document was finalised,” he explained.
This is the second time in recent years that CIMA has contributed to CICA’s development of principles for its members and other captive industry participants. Scotland, was part of the regulator group for the initial volume, Captive Best Practice Guidelines, which was completed in 2008. That volume compiled best practice principles applicable to the business situations of a variety of captives. Scotland said CIMA fully supported both best practice guidelines.
CICA describes itself as the only domicile-neutral captive insurance association, without jurisdictional or commercial ties and not linked with a domicile or government entity. CICA is headquartered in Minneapolis, Minnesota, and its members are domiciled throughout the world, with the highest number in Vermont, Hawaii, Bermuda, the Cayman Islands and the British Virgin Islands. It provides education, networking and leadership for captive and risk retention group professionals.Both Captive Best Practices Guidelines volumes are available through the association’s website: http://www.cicaworld.com.
Category: Business
