Regulatory Policy - Licensing Insurance Brokers, Agents and Agencies

Summary

This is a CIMA Regulatory Policy (issued August 2020) that sets out the Authority's criteria and process for licensing insurance brokers, insurance agents and insurance agencies under Section 4 of the Insurance Law. It explains what must accompany a licence application, the typical processing timeframe, and the factors CIMA will weigh when assessing an applicant.

• Fitness and propriety: Assessed as part of the applicant review.
• Professional qualifications and competence: Considered when evaluating the applicant.
• Ownership and control: Reviewed as a factor in the licensing decision.
• AML/CFT systems: Examined as part of the assessment.
• Industry standards compliance: Weighed alongside the other factors.

The policy applies to persons or firms wishing to carry on business as an insurance broker, insurance agent or insurance agency in or from the Cayman Islands, and distinguishes requirements for corporate intermediaries (brokers/agencies) from individual agents.

• Minimum structural requirements: At least two individuals conducting the business, and at least two directors for corporate applicants.
• Disclosure obligations: Required for significant shareholders and trust structures.
• Physical presence requirements: Applicants must meet specified physical presence criteria.
• Succession planning: Required for entities with small shareholder bases.
• Ongoing professional development: Expected of individual agents and relevant persons.

For insurance agents specifically, the policy requires a sponsoring insurer to be secured before applying, sets out what the sponsor's confirmation letter must contain, and details when a change of sponsor requires a new licence application versus mere notification, including a prescribed fee for licence variations when an agent adds a second insurer.

Key obligations

• Persons wishing to carry on business as an insurance broker, agent or agency must apply in writing to CIMA under Section 4 of the Insurance Law before commencing business.
• Applications must be accompanied by the documents/information set out in the Schedule of the Insurance (Applications and Fees) Regulations, any other information CIMA requires, and the prescribed fee.
• Individual insurance agents and relevant persons must have appropriate professional qualifications or complete a CIMA-approved training programme relevant to the type of intermediation carried out, and must obtain CIMA's prior approval of the training programme before relying on it.
• Individual insurance agents and relevant persons who continue working as intermediaries must undertake continuing professional development, expected to be at least 15 hours of relevant training annually.
• Applicants must demonstrate compliance with fitness and propriety requirements, market conduct rules, conflict-of-interest handling, and AML/CFT (Proceeds of Crime Law, AML Regulations, Guidance Notes) policies and procedures.
• The business of all insurance brokers and agencies must be conducted by at least two individuals, and corporate applicants must have a minimum of two directors.
• Any change in directors, officers or managers of a licensee must be notified to and/or approved by the Authority.
• Applicants must disclose shareholders holding 10% or more of shares or voting power (directly or indirectly) and undergo fitness and propriety assessment of such beneficial owners.
• Where an applicant is held by a trust, the applicant must provide the trust deed and disclose the trustee(s), settlor, protector, beneficiaries and any person able to influence trust decisions.
• Applicants with two or fewer shareholders must provide a succession plan addressing death or critical illness/incapacity of shareholders.
• An applicant for licence as an Insurance Broker or Agency must provide evidence of, and maintain, physical presence in the Cayman Islands from commencement of business.
• An applicant for an insurance agent licence must secure a sponsoring insurer prior to submitting an application, with sponsorship confirmed by formal letter from the sponsor to CIMA.
• An agent transferring to a similarly-natured sponsor must notify the Authority in writing prior to conducting business for the new insurer; a transfer to a significantly different insurance business requires a new licence application.
• An agent wishing to simultaneously represent one general and one long-term insurer must apply to CIMA for a variation of licence terms, subject to a CI$1,000 administrative fee.
• Notifications adding or removing a second insurer for an agent must be supported by specified documentation (e.g., agency agreement, training details, existing licence certificate, applicable fee, and no-objection confirmation from the relevant insurer).

Applies to

insurance brokers, insurance agents, insurance agencies

Deadlines

• annually: Individual insurance agents and relevant persons are expected to complete at least fifteen (15) hours of relevant continuing professional development training on an annual basis.
• prior to submission of an application: An applicant for an insurance agent licence must secure a sponsor before submitting the application to CIMA.
• prior to conducting business on behalf of the new insurer: An insurance agent transferring to a similar sponsoring insurer must notify the Authority in writing before conducting business for the new insurer.
• 4 to 5 weeks: Typical CIMA processing timeframe for a licence application, beginning once all required documents and information have been received.