Cayman Islands Monetary Authority ( CIMA ) CIMA s Role and Functions Presentation to IMAC on 19 April 2016
A brief history of CIMA and its legal basis: Formed on 1 January 1997, by amalgamation of the Cayman Islands Currency Board and the Financial Services Supervision Department. Wholly-government-owned body corporate (Statutory Authority); operationally independent since 10 March 2003. CIMA derives it s powers and legal basis from the Monetary Authority Law (2013 Revision) 2
CIMA is the primary financial services regulator in the Cayman Islands Monetary - The issue and redemption of Cayman Islands currency and the management of currency reserves Cooperative - The provision of assistance to overseas regulatory authorities Advisory - The provision of advice to the Government on monetary, regulatory and cooperative matters Regulatory - The regulation and supervision of financial services, the monitoring of compliance with money laundering regulations Investment Funds and Fund Administrators Banking and related services Insurance services Fiduciary services 3
CIMA s Key Regulatory & Supervisory Activities Framework The Monetary Authority Law, the regulatory laws, regulations, rules and guidance notes issued by CIMA Licensing Processes licence applications, does due diligence on all persons applying to act as directors, shareholders, officers etc. Supervision Both off and on-site monitoring. Enforcement Investigates breaches of the regulations and takes enforcement action where necessary. Action includes, suspension or revocation of a licence, requiring substitution of an officer, controller, winding up or dissolution of entities etc. Prudential CIMA develops and issues rules, statements of guidance and statements of principle following dialogue with the industry, licensees, stakeholders Monitoring AML/CTF compliance - Reducing the possibility for the use of financial services business for money laundering or other crime 4
Supervisory Objectives Adoption of risk-based regulation - proportionality i.e. size, nature and complexity Maintain a fair, safe and stable insurance sector for the benefit and protection of policyholders/beneficiaries Support growth and development of the industry (e.g. captive market, domestic market, commercial [re]insurance sectors, intermediaries) Accessible, responsive, flexible, efficient, transparent Follow IAIS Insurance Core Principles (current member IAIS Reinsurance Task Force) Interactions with industry and licensees International Cooperation CIMA is a founding member of the International Association of Insurance Supervisors ( IAIS ) and was a member of the IAIS Executive Committee A lead validator on International MMoU acceptance Member of Caribbean Association of Insurance Regulators ( CAIR ) Cooperates and shares information with other regulators (over 50 MoUs with overseas regulators) Attend Supervisory Colleges to exchange information 5
What is CIMA s role? Some of its principal obligations include acting in the best economic interest and promoting and maintaining a sound financial system in the Cayman Islands (through robust but appropriate regulation). CIMA is not a Service Provider CIMA is not a Business Development Agency 6
International Cooperation & External Assessment 7
Organisational Structure CIMA consists of 11 divisions, an Onsite Inspection Unit and the Managing Director s Office. Of the 11 divisions, 4 are regulatory divisions (Banking, Fiduciary, Insurance and Investments & Securities); 4 are non-regulatory divisions (Currency, Legal, Compliance and Policy & Development); and there are 3 operational support divisions (HR, IT and Finance). The divisions are headed by Heads of Division and Deputy Heads. There are 3 Deputy Managing Directors ( DMDs ). 1 responsible for the regulatory divisions, 1 responsible for the non-regulatory divisions, and 1 responsible for the operational support divisions. The DMDs report directly to the Managing Director. 8
Structure of the Cayman Islands Insurance Industry Domestic International Insurers Intermediaries Intermediaries Insurers Class A Local Class A External Brokers Agents Insurance Managers Captives SPVs Commercial insurers Reinsurance Pure Captives Group Captives SPCs SPs PICs 9 As at 31 December 2015
Total Licensees by Category Cayman remains the second largest offshore captive domicile in the world, (based on licence numbers) and the largest for number of health care captives. Licence Category Total Licensees Class A Local 9 Class A External 22 Class B 679 Class C SPVs 28 Class D 1 Insurance Managers 32 Insurance Brokers 42 Insurance Agents 49 Segregated Portfolio Companies 140 Segregated Portfolios 603 Portfolio Insurance Companies 3 10 As at 31 December 2015
Why Cayman? Adherence to international standards and best practices IAIS, GIICS, CAIR Be part of the global standard setting process Robust anti-money laundering (AML) and combating terrorist financing (CFT) regimes Proportionality of regulation No one-size-fits-all regulatory system Built-in flexibility of the legislation provides for proportionate application of international standards Decades of experience and expertise in supervising and managing thousands of (re)insurance programs Cayman s regulatory framework encouraging innovation and sophistication Portfolio Insurance Companies ( PIC ) Internal Capital Models
Why Cayman (continued)? Cayman s engagement in the vigorous international cooperation regimes Over 50 bi-lateral and multi-lateral memoranda of understandings Supervisory colleges Importance of the financial services industry to the Cayman s economy Firm commitment to provide the necessary policy and legislation to facilitate orderly development of the industry A culture of consultation and cooperation between CIMA and the insurance industry Industry-CIMA-Government working groups CIMA maintaining its position to be a responsive, pragmatic and accessible regulator The regulators are very accessible to the captive managers, insurance company principals and directors A strong working relationships between owners, managers and regulators Working relationship with Rating Agencies
Thank You Questions 13