Insurance law to boost international business
(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 InsuranceLaw.
“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.
Category: Business
I agree with the previous commenter – particularly regarding a long overdue and much needed Arbitration Law.
Ah! Good, a welcome development for Cayman’s business. Where is the Arbitration Law – there was some talk of trying to make forays into that segment also, which was good. Hopefully this is the next Bill for approval.