The Cayman Islands hovered on the brink of breaking the barrier of 500 registered international insurance companies at the end of 1999. Statistics issued by the Cayman Islands Monetary Authority (CIMA) show that 37 new licences were issued during 1999 and 25 cancelled to bring the total to a tantalising 497. Growth did slow compared to the previous five years, but this was partly a timing difference and there were approximately 20 further applications under consideration by CIMA at the year end. Twenty-five licences were cancelled, reflecting such factors as mergers and acquisitions.
Looking at the statistics in more detail, two more alternative risk financing vehicles were added during 1999 bringing the total to 22 from only eight in 1997. Segregated portfolio companies increased from five in 1998 to 15. Among more traditional types of company, pure, association and rent-a-captives all increased slightly while the number of open market insurers and group captives contracted.
In 1999, 40% of new licences took the form of segregated portfolio companies and alternative risk financing special purpose vehicles (SPVs), categories for which the Cayman Islands has helped pioneer. Says Clive Thursby, newly appointed head of insurance supervision for the Cayman Islands, “Cayman remains at the forefront of developments in these areas, particularly capital market related ventures.”
Mr Thursby adds: “While quality in our view is more important thanquantity, we expect to go through the 500 barrier shortly.”
Mr Thursby, well known in the risk management community in the UnitedKingdom, was appointed to replace William McCullough who retired at the end of 1999 after overseeing three years of exceptional growth in the domicile.The Cayman Islands, thus, continue a practice of appointing their chief insurance supervisor externally.
A governor of the UK's Institute of Risk Management since 1995, Mr Thursby was a freelance risk management consultant. Previously, he had worked at Tillinghast-Towers Perrin in London, where he was responsible for expanding the consulting practice as a base for European activities, and as head of risk financing at Bowring Marsh and McLennan, now Marsh.
His responsibilities as head of insurance supervision for the Cayman Islands Monetary Authority (CIMA) will be to monitor, regulate and developboth the domestic and international insurance industry in the Cayman Islands and ensure that they are operated in a prudent manner and identify licence holders who are breaking the law or failing to meet requirements.
CIMA managing director, Neville Grant comments: “Industry products andpractices are changing rapidly and supervisors must be able to deal with a range of increasingly complex issues. In addition, more and more attention is being focussed on the regulatory and supervisory capabilities of international financial centres.”
Cayman has again shown itself the most informative of all captive domiciles, able to provide a detailed picture of business during 1999 by the beginning of February.