Insurance (Exemption) Regulations, 2004

Summary

These 2004 regulations, made under the Insurance Law (2003 Revision), grant a specific exemption to the association of underwriters licensed with the Cayman Islands Monetary Authority as Lloyd's of London. Lloyd's of London is exempted from the statutory deposit/margin requirement set out in section 7(1) of the Insurance Law, which would otherwise apply to it as an insurance licensee.

Conditions of the Exemption

• The exemption is conditional: instead of complying with section 7(1) directly, Lloyd's of London must deposit or maintain cash or securities in a segregated account to cover its liabilities in the Cayman Islands.
• This account must be held at a retail bank in the Islands holding an 'A' licence under the Banks and Trust Companies Law, or at another institution approved by the Authority.
• The timing, amount, and manner of this deposit are to be determined by the Authority from time to time, having regard to the nature and scale of Lloyd's business in the Islands.

This is a narrow, entity-specific regulation rather than a general rule applicable to the insurance industry as a whole; its practical effect is limited to Lloyd's of London's Cayman operations.

Key obligations

• Lloyd's of London must deposit or maintain cash or securities in a segregated account to cover its liabilities in the Cayman Islands, in place of complying with section 7(1) of the Insurance Law.
• The segregated account must be held at a retail bank in the Islands holding an 'A' licence under the Banks and Trust Companies Law (2003 Revision), or at another institution approved by the Authority.
• Lloyd's of London must deposit/maintain such cash or securities at the times, in the amounts, and in the manner determined by the Authority from time to time.

Applies to

Lloyd's of London (association of underwriters licensed with the Authority)