Archive for October 3rd, 2010

Insurance law to boost international business

| 03/10/2010 | 2 Comments

(CNS): Following the long awaited passage of the new insurance law, the legislation has been welcomed by members of the financial sector who say it puts Cayman is a position to meet market demand for a diverse range of reinsurance products. It is hoped that he modernisation of the law which helps Cayman meet important international standards will provide a boost to the sector. The new law was passed in the Legislative Assembly last month and properly regulates the insurance industry for the first time offering protection to local customers as well as facilitating the wider international, commercial development of the industry.

 
The Insurance Law, 2010 is a collaboration of public and private sector efforts to improve the regulation of the insurance business and enhance protection for domestic consumers, a government official said in a release from the ministry of finance.  
 
One of the coordinators of the legislative process on the public sector side, Deputy Chief Officer in the ministry Samuel Rose said”: “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.
President of the Cayman Islands Insurance Association, Garth McDonald said the association supported 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,” he added.
 
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,” he said. “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.”
 
Ferrari said he was thrilled at the passage of the law as it represents an opportunity and an enormous step forward. 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.
 

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Arrests made in latest killings

| 03/10/2010 | 34 Comments

(CNS):  Updated Monday 8:30am-Police say they have now arrested four men in relation to Cayman’s two most recent murders. On Sunday a 39-year-old man was arrested in relation to the shooting of 20-year-old Tyrone Burrell, who was killed in Birch Tree Hill, West Bay, in September. Two men were also arrested over the weekend in connection with the violent slaying of Jack Forbes in Bodden Town on Friday night. An 18-year-old and 36-year-old man are both in police custody having been arrested for murder following operations in George Town and North Side in connection with that crime. On Monday morning police confirmed the arrest of a third, 20 year old man, on Sunday also in conncetion with the Forbes murder.(Photo Dennie Warren Jr)

Forbes,who was 49, was reportedly beaten to death in the Plaza Odessa following a fight which had erupted at a bar. The three arrests were made after a series of targeted operations involving USG, CID and uniform officers, police said.

Then on Sunday 3 October another RCIPS joint operation involving CID, uniformed officers, the Air Operations Unit, Scenes of Crime staff and the USG was launched in the Birch Tree Hill area.

During the operation a man was arrested on suspicion of murder, possession of ganja and consumption of ganja. The man currently remains in police custody. Officers said that another 30-year-old man was arrested in the same operation on suspicion of possession of ganja and consumption of ganja.

Burrell was gunned down in what was believed to be another gang related killing in a yard in Birch Tree Hill during a social function, in the same location where Damion Ming was killed in March. Police said that Burrell was not a police witness in any investigation but they believed he did have information relating to a current criminal case and had chosen not to reveal that information. Police have charged 26-year-old Raziel Jeffers with Ming’s killing.

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Hedge fund exodus could cost UK millions

| 03/10/2010 | 0 Comments

(FT.com): Britain will lose hundreds of millions of pounds in tax revenues every year as a result of top hedge fund managers moving overseas, with the departure of just two to Switzerland estimated to cost the Treasury more than £200m. So faronly a handful of hedge fund partnerships have moved their headquarters offshore but a far greater number of individual employees than previously acknowledged have moved to subsidiary offices abroad. Hedge fund managers are relocating to Switzerland because of its stable tax system and to avoid “fiscal volatility and political hostility” in the UK. The departures of Alan Howard founder of Brevan Howard Asset Management LLP, Europe’s biggest hedge fund, and Mike Platt of BlueCrest Capital Management will cost the treasury £200m in lost revenue.

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CI has to improve records

| 03/10/2010 | 17 Comments

(CNS): Following the first round of the OECD peer review, Cayman has been advised of the need to improve record keeping in the financial sector. In response to some of the shortcomings that were identified in this report, the premier has said government has already taken legislative steps to address the issues raised in the global forum review. The Cayman Islands was one of the first countries to be reviewed regarding financial transparency and exchange of information. Although the report said Cayman had, in general, a well developed legal and regulatory framework, when it came to maintaining accounting information it did not meet international standards. The review also revealed a lack of penalties for entities that do not properly maintain information.

The report said that the absence of appropriate sanctions was of particular concern, given the number of unregulated mutual funds operating in the Cayman Islands. “With an estimated 3,000 unregulated mutual funds resident in the Cayman Islands managing an unknown amount of assets, this deficiency has potentially significant adverse consequences,” the report said.
 
The report highlighted the issue that while Cayman has enacted laws and regulations to deal with transparency and information exchange, it still has some way to go before they are effectively and properly implemented.
 
The review highlighted the particular problem of the exemptions of private trust companies from licensing requirements and said this area of “significant omissions” would be examined during the next phase of the reviews.  The peer review also found that the local law in respect of accounting records was inconsistent and did not require partnerships and trusts to keep reliable records.
 
The report did acknowledge, however, that the secrecy provisions in local laws were over ridden when information is required via ‘exchange of information’ and that Cayman’s network for exchange had developed rapidly. It said the latest changes in legislation would be examined in phase two of the pier review.
 
Following the publication last week of the reports, McKeeva Bush told the global forum at the meeting in Singapore that the Cayman Islands government has taken immediate steps to address the areas that needed improvement identified in the Peer Review Report.
 
Bush said that amending legislation governing all forms of companies and partnerships were pushed through the country’s parliament on 15 September stipulating a 5-year minimum retention period for the relevant accounting records that all forms of companies are required to maintain and imposed specific obligations on all forms of partnerships, including exempted limited partnerships, to retain relevant accounting records, including underlying documentation.
 
“Similar legislative amendments in relation to trusts are being finalized for presentation to our legislature and will be presented in November 2010, at the latest,” the premier stated. This next legislation will be dealing with the issue of trusts, which was identified as a problem by the report.
 
 “In order to address the recommendation relating to effective sanctions, each piece of amending legislation includes provisions for enhanced sanctions against companies, partnerships and trusts where they fail to comply with the statutory requirements to maintain relevant accounting information,” Bush added.
 
He said the Cayman Islands was committed to doing its part in advancing the work of the Global Forum, demonstrated by the continuing commitment to the process, its participation over the past 10 years and the signing of 20 TIEAs, including 16 of the 30 OECD member countries. He pointed out that the review itself was a significant accomplishment for all those involved and was an important contribution to the understanding of each country’s approach to the global standards.
 
“As a small country with unique expertise to share, we look forward to making a distinctive contribution in this critical area for many more years to come,” Bush told the forum.
 
The Cayman Islands was one of the first of eight countries to be assessed under the Global Forum’s Peer Review Programme. The reports of the assessed countries were approved at the Peer Review Group meeting held in July in the Bahamas and were eventually adopted at the Singapore meeting. The Cayman Islands is a member of the Global Forum, as well as a member of the Steering Group and Peer Review Group. The other countries included Bermuda, India, Botswana, Jamaica, Monaco, Panama and Qatar.
 
Following the publication of these first reviews, the Chair of the Global Forum, Mike Rawstron of Australia, said the jurisdictions involved were taking the standards seriously. “This is the most comprehensive, in-depth review on international tax co-operation ever. There has been a lot of progress over the past 18 months, but with these reviews we are putting international tax co-operation under a magnifying glass,” he said “The peer review process will identify jurisdictions that are not implementing the standards. These will be provided with guidance on the changes required and a deadline to report back on the improvements they have made.
 
He said the reports show that this is not just a numbers game but about having legal and regulatory frameworks which enable effective exchange of information.
 
A delegation of eight people from Cayman headed by the premier as minister of finance, attended the meeting in Singapore last week where the reports on all eight countries were revealed as well as the OECD’s next steps for the review process.
 
The Cayman Islands delegates joined those from 79 jurisdictions and a number of international organisations. During the Global Forum, the Cayman Islands delegation also completed technical negotiations with India and Greece and initialled the agreed text of the tax information exchange agreements with these two countries. It is expected that the agreements will be officially signed before the end of this year
 

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