Bradley Kruger
Partner | Legal
Cayman Islands
Partner
Cayman Islands
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Introduction
On August 28, 2017, the Cayman Islands Monetary Authority (CIMA) released an updated Statement of Guidance (SOG) on the Responsibilities of Insurance Managers, updating the original SOG first issued in 2003. The new SOG was issued in response to updates in the relevant law as well as requests from the industry for clarification from CIMA on compliance with the previous SOG.
SOGs contain recommendations on how licensees should operate and represent a measure against which CIMA will assess compliance by licensees. This particular SOG sets out the minimum expectations on the responsibilities of Insurance Managers (as defined under the Insurance Law, 2010 (Revised) (Law)) of Class B and Class C insurance licensees (Client Insurers) as service providers to clients and as licensees to CIMA. Prior to finalising this SOG, CIMA consulted with the private sector and has published its feedback from the consultation process which can be accessed here.
CIMA has stated that the SOG is not intended to be prescriptive or exhaustive and should be read in conjunction with the regulatory measures governing all Insurance Managers in the Cayman Islands.
Key Features of the SOG
The SOG is split into 3 separate sections:
(a) Role of Insurance Managers;
(b) Relations with CIMA; and
(c) Relations with Client Insurers.
Role of Insurance Managers
The SOG states that Insurance Managers are responsible for the day to day operations of their Client Insurers and should have the requisite knowledge, competence or access to expertise to help Client Insurers fulfil their financial, legal, and regulatory obligations.
The SOG includes a non-exhaustive list of the responsibilities of an Insurance Manager towards a Client Insurer, including:
The SOG acknowledges that Insurance Managers may delegate some of their responsibilities, but states that they retain ultimate responsibility for those functions.
Minimum requirements relating to the role of the Insurance Manager include:
CIMA expects that the Insurance Manager's "mind and management" will be in the Cayman Islands.
Relations with CIMA
CIMA expects that the Insurance Manager will be the principal point of contact between the Client Insurer and CIMA and that it is the responsibility of the Insurance Manager to keep CIMA updated in relation to the Client Insurer and to respond, in a timely manner, to any questions from CIMA related to the Client Insurer. CIMA may, however, communicate directly with a Client Insurer.
A non-exhaustive list of specific responsibilities of the Insurance Manager as point of contact includes:
As the SOG highlights, it is a legal requirement that all Insurance Managers notify CIMA if they have concerns about the fitness and probity, or the financial soundness, of a Client Insurer.
Relations with Client Insurers
The SOG states that Insurance Managers should diligently manage the business of Client Insurers and provide such insurance expertise as may be required. In addition to day-to-day management of Client Insurers' insurance businesses, this includes:
Minimum requirements relating to the relationship of Insurance Managers with Client Insurers include:
The SOG recommends a formal written agreement between the Insurance Manager and the Client Insurer which should be reviewed periodically and should include (among other things):
A copy of the SOG can be obtained from the CIMA website or by clicking here.
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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