insurance

Who is caught

The Insurance Act, 2010 (originally the Insurance Law, 2010) is the core statute governing insurance in the Cayman Islands, administered by the Cayman Islands Monetary Authority (CIMA). It establishes a licensing regime and prohibits carrying on insurance business, reinsurance business, or acting as an insurance agent, broker or manager without a licence.

• Licensed entities: Insurers (Classes A, B, C and D, including local and external insurers), insurance agents, insurance brokers and insurance managers licensed under the Insurance Act.
• Portfolio insurance companies: Exempted companies controlled by a segregated-portfolio insurer that register with CIMA as portfolio insurance companies (PICs) to carry on insurance business for a specific segregated portfolio, without a separate insurance licence.
• Capital redemption contracts: The 2022 amendment brings capital redemption contracts (funding agreements) within scope, treating them as contracts of insurance/reinsurance and as long term business, so insurers and reinsurers issuing them are caught.
• Corporate services providers: Insurance licensees that also act as corporate services providers are brought within CIMA oversight of beneficial ownership register compliance.
• Insurance intermediaries and staff: CIMA rules on market conduct and professional qualifications extend to insurers, agents, brokers and agencies and to their sales, customer-handling and advice-giving employees.

The 2023 amendment extends criminal liability under the Act beyond corporations to partnerships, limited liability partnerships, exempted limited partnerships and unincorporated associations, and to the individuals who manage or control them. The Monetary Authority Act confirms CIMA's regulatory remit covers insurance companies alongside other financial services businesses.

Sources: Insurance (Amendment) Law, 2017 (Law 45 of 2017) · Insurance (Amendment) Act, 2022 (Act 5 of 2022) · Insurance (Amendment) Act, 2023 (Act 4 of 2023) · Insurance (Amendment) Law, 2013 (Law 16 of 2013) · Insurance (Portfolio Insurance Companies) Regulations (2026 Revision) · Insurance Law, 2010 (Law 32 of 2010) · Monetary Authority Law (2020 Revision) · Rule on Professional Qualification Requirements for Insurance Companies, Brokers, Agents and Agencies · Rule - Market Conduct - Insurers, Agents and Brokers

Key duties

Licensing and fees

• Licence required: A person must not carry on insurance, reinsurance, or agent/broker/manager business without a valid licence, applying in writing to CIMA with a business plan and the prescribed fee (Insurance Act s.3-4), using the forms prescribed in the Applications and Fees and Forms Regulations.
• Annual licence fee: The prescribed annual licence fee is payable on or before 15 January each year, with a monthly surcharge for late payment. Segregated portfolio companies pay an additional per-portfolio fee, and reduced (50%) or pro-rated (one-twelfth for December grants) fees apply in specified circumstances.
• Fee amounts: Fee schedules are set out in the Applications and Fees Regulations; the 2025 amendment increased Schedule 2 items 2, 3 and 4 to $10,450, $11,550 and $14,850 respectively.

Periodic filings

• Annual return: Insurers must file an annual return using the prescribed forms, generally within six months of financial year end, including audited financial statements, actuarial valuation, solvency certification and business/underwriting reports (Reporting Regulations).
• Certificate of compliance: Each licensed insurer (other than an approved external insurer) must furnish a certificate of compliance within six months of financial year end (Forms Regulations).
• Actuarial valuation: Insurers (other than Class C insurers and Class B insurers not writing long-term business, unless CIMA requires) must submit an actuarial valuation certified by a CIMA-approved actuary within six months of financial year end.
• PIC filings: PICs must file, within six months of financial year end, audited financial statements, an annual declaration, and (unless exempt) an actuarial valuation and solvency certificate, and calculate their prescribed capital requirement at each filing date.

Capital and solvency

• Class A insurers: Must maintain available capital above the minimum and prescribed capital requirements, calculate and record these quarterly, retain calculations for five years, and notify CIMA within thirty business days of quarter-end of any shortfall; external insurers writing domestic business must hold trust assets in the Islands at least equal to the prescribed capital requirement.
• Classes B, C and D insurers: Must calculate capital requirements at each filing date, maintain solvency at or above the prescribed capital requirement, submit a capital and solvency return by the filing date, retain it for five years, and present a remedial action plan to CIMA if capital falls between the minimum and prescribed requirements.
• PIC capital: PICs must maintain the minimum and prescribed capital requirements and engage with CIMA and present a remedial plan if capital falls below the prescribed threshold.

Governance and risk

• Corporate governance: Regulated entities must establish and maintain a documented corporate governance framework, hold governing body meetings at least annually with minutes, review the framework annually, and notify CIMA within ten days of any substantive issue that could materially affect the entity.
• Internal controls: The governing body and senior management must establish and maintain an adequate internal control system with a documented organisational structure and accountability.
• Risk management: Insurers must maintain a documented, Board-approved risk management framework covering all material risks, subject to independent review.
• Investment activities: Insurers and PICs must establish an Investment Policy submitted to CIMA for approval, and (except Class B(i) and B(ii) insurers) an Investment Committee; they must disclose material breaches and significant losses to CIMA.
• Reinsurance: Insurers using outward reinsurance must maintain a Board-approved reinsurance strategy and programme, use Regulated reinsurers and brokers absent CIMA approval, and notify CIMA of material changes or problems.
• Professional qualifications: Insurers, brokers, agents and agencies must ensure relevant persons hold appropriate qualifications, complete continued professional training (at minimum 10 hours annually and 30 hours every two years), and report annually to CIMA on those persons' qualifications.

Other obligations

• Records and accounts: Licensees must maintain proper records, separate long-term and general business accounts, and trust funds where applicable; brokers and managers must carry professional indemnity insurance.
• Share transfers: Licensees must not issue or transfer shares without CIMA approval; PICs face specific restrictions on voting and non-voting share issues and transfers.
• Market conduct: Class A insurers and intermediaries (and Class B insurers dealing with retail third-party policyholders) must meet binding market conduct standards across disclosure, advice, product design, complaints and claims handling.
• AML/CFT: Insurance business providers and managers, as financial services providers, must maintain AML/CFT/CPF compliance programmes, designate an AMLCO, MLRO and DMLRO, and comply with sanctions and reporting obligations under CIMA rules and guidance.

Sources: Insurance (Applications and Fees) (Amendment) Regulations, 2025 (SL 65 of 2025) · Insurance (Applications and Fees) Regulations (2026 Revision) · Insurance (Capital and Solvency) (Class A Insurers) Regulations, 2012 · Insurance (Capital and Solvency) (Classes B, C and D Insurers) Regulations (2018 Revision) · Insurance (Forms) Regulations (2003 Revision) · Insurance (Portfolio Insurance Companies) Regulations (2026 Revision) · Insurance (Reporting) Regulations, 2013 · Insurance (Variation of Fees) Regulations, 2009 · Insurance Law, 2010 (Law 32 of 2010) · Rules and Statement of Guidance on Reinsurance Arrangements · Rule on Investment Activities of Insurers (February 2022) · Rule on Professional Qualification Requirements for Insurance Companies, Brokers, Agents and Agencies · Rule - Market Conduct - Insurers, Agents and Brokers · Rule - Risk Management for Insurers (March 2015) · Rules and Statement of Guidance - Actuarial Valuations (December 2019) · Rule on Corporate Governance for Regulated Entities (April 2023) · Rule and Statement of Guidance – Internal Controls for Regulated Entities · Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands (2020 Revision)

Exemptions and carve-outs

The instruments provide several entity-specific and activity-specific carve-outs.

• Lloyd's of London: The Insurance (Exemption) Regulations, 2004 exempt Lloyd's of London from the statutory deposit/margin requirement in section 7(1), on condition it maintains cash or securities in a segregated account at an Islands 'A'-licensed bank (or CIMA-approved institution) as CIMA determines.
• Derivative contracts: The Applications and Fees Regulations (Regulation 5) clarify that certain derivative-type contracts (options, swaps, futures, forwards, contracts for differences and similar) do not, by themselves, constitute carrying on insurance business.
• PIC filing exemptions: A PIC that does not conduct long-term business, or conducts business of the type in section 4(3)(c) of the principal Act, is exempt from the actuarial valuation and solvency certificate requirements.
• Actuarial valuation scope: The Actuarial Valuations rules do not apply to Class C insurers or to Class B insurers that do not write long-term business (unless CIMA specifically imposes a requirement), or to insurers granted a written exemption by CIMA.
• Reinsurance rule: The Reinsurance Arrangements rules apply only to insurers and PICs that actually use outward reinsurance; entities that do not use reinsurance are outside scope.
• Market conduct: The market conduct Rule and Guidance exclude reinsurance business.
• Professional qualifications: Persons who merely refer or introduce customers without intermediating, or who give incidental or general insurance information as part of another profession, are excluded from the qualification requirements.
• Investment rule waiver: CIMA retains discretion to waive application of the Rule on Investment Activities to a given insurer under specified conditions.
• Outsourcing guidance: The Outsourcing Statement of Guidance excludes regulated mutual funds, Private Trust Companies and Private Funds as defined in their respective Acts.
• Reduced fees: A licensee or registered person that has ceased carrying on insurance business (other than winding down existing obligations) may pay a reduced annual fee of 50%, reverting to the full fee if new contracts are effected.

Sources: Insurance (Applications and Fees) Regulations (2026 Revision) · Insurance (Exemption) Regulations, 2004 · Insurance (Portfolio Insurance Companies) Regulations (2026 Revision) · Rules and Statement of Guidance on Reinsurance Arrangements · Rule on Investment Activities of Insurers (February 2022) · Rule on Professional Qualification Requirements for Insurance Companies, Brokers, Agents and Agencies · Rule - Market Conduct - Insurers, Agents and Brokers · Statement of Guidance - Market Conduct - Insurers, Agents and Brokers · Rules and Statement of Guidance - Actuarial Valuations (December 2019) · Statement of Guidance: Outsourcing – Regulated Entities (April 2023)

Enforcement and penalties

Enforcement powers are spread across the Insurance Act, the Monetary Authority Act and CIMA's administrative fines regime.

• Insurance Act offences: The Insurance Act creates offences for operating without a licence, using the word 'insurance' improperly, and providing false or misleading information, and gives CIMA power to issue directions, impose conditions, preserve assets, and revoke or suspend licences.
• PIC false information: A PIC, applicant, or its directors or officers who knowingly or wilfully supply false or misleading information to CIMA in connection with PIC registration are liable to a fine of up to $100,000 and/or up to five years' imprisonment.
• Extended liability: The 2023 amendment makes partners, senior officers, and persons concerned in the management or control of partnerships, LLPs, exempted limited partnerships and unincorporated associations personally liable for insurance offences committed with their consent, connivance or neglect.
• Administrative fines: Under the Monetary Authority Act and the Administrative Fines Regulations, CIMA may impose administrative fines for breach of a 'prescribed provision' (including insurance provisions), classified as minor, serious or very serious and attracting fixed, fixed-continuing or discretionary fines, following a prescribed breach-notice process. A recipient may rectify within thirty days, reply within the stated period, apply to the Management Committee for review of a fixed fine, or apply to the Grand Court for leave to appeal a discretionary fine; an unpaid fine is a debt to the Crown.
• Rule breaches: Breach of CIMA's binding Rules (for example on corporate governance, internal controls, risk management, investment activities, reinsurance, market conduct and professional qualifications) is addressed through CIMA's Enforcement Manual and its other powers under the Insurance Act and Monetary Authority Act.

The instruments indexed here do not set out a single consolidated schedule of specific fine amounts for most insurance breaches; those are determined through the Administrative Fines Regulations process rather than fixed in the Insurance Act summaries provided.

Sources: Insurance (Amendment) Act, 2023 (Act 4 of 2023) · Insurance (Amendment) Law, 2013 (Law 16 of 2013) · Insurance Law, 2010 (Law 32 of 2010) · Monetary Authority (Administrative Fines) Regulations (2025 Revision) · Monetary Authority Law (2020 Revision) · Rule on Investment Activities of Insurers (February 2022) · Rule - Risk Management for Insurers (March 2015) · Rule on Corporate Governance for Regulated Entities (April 2023) · Rule and Statement of Guidance – Internal Controls for Regulated Entities