and regulatory framework in place with oversight by an open and
approachable insurance regulator, focused on appropriate but
proportionate regulation of the industry.
“There are more domiciles in competition with us: you just have to
look at the US market, where more than 30 states now have captive
legislation on their books to try and attract business,” says Michael
Gibbs, president of Kensington Management Group.
“People get interested in a captive and they think ‘where’s the
best place to do it?’. There is definitely a strong element about going
to a domicile such as Cayman that has the history, strength and
infrastructure to give them the right level of support.
“Do we see challenges from Vermont and South Carolina and
the other main US onshore domiciles? Yes, absolutely, and that’s a
good thing as it keeps us on our toes. There is a historic perception
about offshore domiciles that business is being done there for tax
avoidance and other scenarios that are so far from the truth, so there
is still significant education that needs to be carried out, but these
issues can be overcome,” he says.
“Certainly in the statistics I’ve seen, there hasn’t been much in the
way of redomiciling overall, certainly not from Cayman, and we are
still seeing continued growth, with 2017 being another strong year
for the domicile.”
Humphries agrees that Cayman faces a threat from redomiciling.
“Yes, of course,” he says. “We continue to see other jurisdictions
both onshore and offshore taking steps to develop legislation and
infrastructure to encourage the growth of their own captive insurance
industries and the economic benefits they hope will follow.
“There is now more competition than ever between domiciles
trying to attract new incorporations and also the transfer-in of existing
captives business from other domiciles.”
According to Humphries, although no formal statistics are available,
a number of discussions Solomon Harris has had with significant
industry participants seem to place the number of transfers in and
out of Cayman at roughly five per annum over the last five years. In
an industry with over 700 insurance licensees those numbers don’t
appear to be indicative of a trend in any particular direction.
“As a leading insurance practice in Cayman, we have not seen any
transfers-out this year but are currently dealing with two interesting
transfers-in, both from other well-known offshore jurisdictions,” says
cayman captive 2018 39
cells among them, a significant number of which will each house
completely separate captive insurance programmes.
Innovate and respond
Humphries says that Cayman’s success as an insurance and
financial services jurisdiction stems from its ability to innovate
and respond to market demands. As a British Overseas Territory,
Cayman continues to adapt and provide solutions in a businessfriendly,
politically stable environment, with a respected judiciary and
common law legal system based on English law.
The insurance industry is well established, with sophisticated
service providers including insurance managers, lawyers, bankers
and auditors, all with significant industry experience who are used
to providing high quality services in a very competitive environment.
Finally, there is a well thought-out captive-specific legislative