Cayman Islands Financial Services

Captives are insurance companies that only insure the risks or part of the risks of its parents, or are wholly-owned insurance subsidiaries of organisations not in the insurance business. They are generally owned through a common interest which is not primarily in the insurance business. This interest may be a single-parent shareholder or a group of shareholders. A significant proportion of the risk written is ‘captive’, related in some way to the risks of shareholders, or third party risks which the shareholders control. So, a captive is an insurer that writes risks whose origins are restricted, or those risks to which it has unique access.

Captive insurance has a history of success in the Cayman Islands. During the 1970s, there was a major crisis in the professional liability market in the United States. Because of that, a prominent US medical college developed the first Cayman Islands captive insurance company to provide
coverage for its medical malpractice risks for physicians. Soon, others followed. As a result, a regulatory framework was developed and the Insurance Law introduced in 1979.

A Cayman Captive has the following benefits:
• Top domicile with track record of success and innovation
• Flexibility to tailor coverage
• Cost reductions
• Risk retention, risk management and loss control
• Cash flow benefits
• Tax minimisation or deferral
• Access to the reinsurance market
• Diversification into a profit
• ‘Unbundling’ of services
• Reduction of government regulations and restrictions
• Highly developed captive support industry with experienced professionals

Currently, the Cayman Islands is the second largest offshore captive insurance domicile, and the leading domicile for health care captives in the world. Business is made by a various of companies, from small private shareholders to large public corporations.

The Cayman Islands has announced that it is expanding an airport with a view to allow direct flights from Cayman Brac to the United States.

According to Airport Authority marketing manager Caren Thompson-Palacio, the expansion of the Gerrar-Smith International Airport is expected to boost tourism on the island. The construction should start in the next couple of months but an estimated cost for the project is not known yet.

Currently, travelers going from Cayman Brac to Miami must stop first in Grand Cayman as the smaller airport lacks adequate passenger screening facilities.

Offshore Incorporations Limited (OIL) is opening its first European office in London. This leading global company formation specialist based in Asia commented that the move will allow to further support Asia-based companies which increasingly require international structures to facilitate strong capital flows from Asia to Europe.

Offshore Incorporations Limited serves professional intermediaries. The company specializes in offshore company formation the Cayman Islands as well as Anguilla, the Bahamas, the British Virgin Islands, Delaware, Hong Kong, Mauritius, Samoa, the Seychelles and Singapore.

CEO for OIL, Martin Crawford, said that this is the 1st step aimed to expand OIL’s presence across Europe and it is an exciting milestone for the business that has just celebrated 25 years in Asia. He said: “We wish to continue supporting our clients as they grow globally and require a wider variety of services for their offshore activities. You just need to look at the fact that over 50% of new properties in London are purchased by Asian investors to see the growth in demand.”

Cayman Finance, a private-sector membership-based organisation that promotes Cayman’s financial services industry through public relations, public affairs and marketing initiatives has announced that Richard Coles has been voted in as its incoming chairman.

Coles is former Attorney General for the Cayman Islands with an impressive resume. He is currently an independent director for hedge funds, structured finance vehicles and investment and financial sector companies and had built a successful law firm in England before he moved to the Cayman Islands. So, he should be a good leader for Cayman Finance, which is the voice of Cayman’s financial services industry.

At an annual general meeting of Cayman Finance held on April 13, 2011, Coles was talking about his commitment and his capabilities to further develop Cayman Finance’s relationship with the Cayman Government.

Also, a new board was elected. The directors of Cayman Finance are Peter Cockhill (Ogier), Nick Freeland (PWC), Gonzalo Jalles (HSBC), Mark Lewis (Walkers), Roy McTaggart (KPMG), Conor O’Dea (Butterfield), David Roberts (Cayman Management), Daniel Scott (Ernst & Young), Henry Smith (Maples and Calder), Ian Wight (Deloitte).

http://cayman-islands-financial-services.offshore-journals.com/wp-admin/

Research and Markets has announced the addition of the report titled “Offshore Financial Services in Cayman Islands, 2005-2009 (Databook)” to their offering.

The databook highlights key data on the offshore financial services market in the jurisdiction. The data provided in this report includes total deposits, total mutual fund investment and their market segmentation. All the data provided in Offshore Financial Services in Cayman Islands are historical and regards 2005-2009.

When reviewing total deposits, the report provides a comparison of offshore and onshore, and retail and institutional customers. When reviewing total mutual funds, it offers a comparison of offshore and onshore, and retail and institutional customers.

The report shows that, over the 2005-2009 period, deposit balances in Cayman increased at a CAGR of 15.2%. Also, over this period, mutual fund balances increased at a CAGR of 18.1%.

The report is useful for understanding how the offshore financial services market in the offshore jurisdiction has developed over the period, to get to know about the size of the deposits and mutual funds as well as to be able to make adequate business decisions through an understanding of the overall trends within the Cayman market.

Corporate and finance law and associated fiduciary services provider Ogier Partners has recently been awarded as the Top Offshore Law Firm. This is the 2nd consecutive year when Ogier receives the Top Offshore Law Firm Award from the Alpha Hedge Fund Service Provider Survey.

Alpha Awards tabulated this year’s results from responses of more than 1 000 hedge fund firms, which manage an estimated USD 1.4 trillion in assets. The votes of hedge fund managers were collected by Alpha magazine. Hedge fund managers rated the quality of service by their providers of legal, administration, prime brokerage and audit services. The service elements were divided into broad categories with more specific sub-units. The importance of each service attribute, forming the basis of the calculation was also rated by the respondents.

In accordance with the result, Ogier was put at the top of the list in the “Overall” category.

Also, Ogier placed 1st in 2 new rankings for 2007. These were “Small Firm Favourites” (managers with less than USD 1 billion in assets) and “Big Firm Favourites” (hedge fund firms with assets USD 1 billion or more). Ogier got top assessments in the subsidiary categories of client service, document preparation and fund formation, hedge fund expertise and regulatory, and compliance.

Peter Cockhill, Ogier Partner, said that this award is the result of the expertise and hard work of Ogier’s attorneys and support staff who have managed to prove for the 2nd time that they are the best in the business.

In 2006, The Lawyer named Ogier “the offshore giant across 9 jurisdictions”. Ogier in the Cayman Islands is a full-service firm specializing in international finance and corporate law and an authorized listing agent for the Cayman Islands Stock Exchange (CSX) . Its wholly owned affiliate company, Ogier Fiduciary Services (Cayman) Limited provides tailored fiduciary and administrative services in the areas of investment funds, trusts, structured finance vehicles, companies and partnerships. It holds a Trust Licence and a Mutual Funds Administrator’s Licence issued by the Cayman Islands Monetary Authority (CIMA) .

According to the Cayman Islands Financial Services Association (CIFSA), the Cayman Islands Stock Exchange (CSX), which in June celebrated its 10th anniversary, has made a major contribution to the Cayman financial services industry.

CIFSA suggests that the 1st decade of achievements of the Cayman Islands Stock Exchange is a great contribution to the strength of the financial sector in the Cayman Islands. CIFSA director Eduardo Silva said that “the growth of the Cayman Islands Stock Exchange over the past decade has underpinned the growth across the financial services sector, increasing the attractiveness of the various industry segments to international clients, while ensuring that participating investors can rely on the jurisdiction meeting the highest standards of compliance”.

He also added that the development of hedge funds and structured finance in the Cayman market was a result of the quality of the listing services and growing international reputation of the CSX.

The CSX was initially established to provide a listing facility for the mutual funds and specialist debt products in the Cayman Islands, however, now it covers a great variety of complicated vehicles and structures including Eurobonds, depository receipts, derivative warrants, preferred shares and international equity. Currently there are more than 1 400 listings on the Exchange.

The growth in listings was stimulated by the international recognitions received by the CSX.

Particularly, in March 2004 the UK’s Inland Revenue named the CSX as a “Recognised Stock Exchange”, which made it more commercially attractive to UK investors. Also, in 2003, the CSX was also admitted as an affiliate member of the International Organisation of Securities Commissions (IOSCO). In 2001, the Cayman Islands Stock Exchange became the 1st (and is still the only) offshore exchange that joined the Intermarket Surveillance Group dealing with information sharing and enhancing market surveillance. In 1999, the CSX became the 1st offshore stock exchange registered with the London Stock Exchange.

According to the Global Financial Centres Index (GFCI), the Cayman Islands is the 16th most competitive financial centre in the world.

The City of London Corporation is the municipal body of London’s financial district that made the study evaluating the competitiveness of 46 major financial centres located all over the world.

To assess the competitiveness of financial centres, the study evaluated many criteria that included regulation, corruption levels, the flexibility of the labour market, ease of doing business, the cost and availability of office space and development of human capital. It also took account of the results of an online survey of financial practitioners all over the world.

Each financial centre was given a score out of 1 000. London was ranked 1st, and its score was 765, while Cayman scored 604.

Cayman has been ranked 16th, which is behind such traditional onshore centres as London, New York and Hong Kong, however, it is ahead of such offshore competitors as Bermuda, the Channel Islands and Dubai.

According to the City of London study, Cayman is the 16th highest-ranking financial centre, however, it is also the 11th leading country in the world as far as some financial centres placed in the table ahead of Cayman are from the same country (US and Swiss cities).

The chairman of the Cayman Islands Monetary Authority (CIMA),Timothy Ridley, said that the report’s overall findings are really excellent for a country with a population of only 55 000 people.

The Cayman Islands Chamber of Commerce (CICC) based in Grand Cayman is considered to be the ultimate resource for business, investment and financial services in the Cayman Islands. It was established to promote and protect business, commerce, trade, agriculture, industries, manufactures and public welfare of Cayman and in Cayman.

CICC is a private organization, not a government agency, funded primarily by member dues. CICC is a member-driven organization having a large affiliation with local businesses and individuals. Its programs, projects, events and products are aimed at delivering strategic solutions to them.

It is worth mentioning that CICC is the largest and most influential business organization in Cayman. It has more than 600 members; 85% of them are small businesses and about 25% are employees.

Networking opportunities, community involvement, political advocacy, image enhancement, information access, numerous discounts and additional local exposure are the benefits of CICC membership.

CICC website provides lots of information on Cayman islands’ financial services, investing in Cayman, employment opportunities, CICC member programs, visiting Cayman and many other issues.

The Indonesia’s anti-money laundering watchdog has signed the cooperation agreement with the Cayman Islands as well as South Africa.

The cooperation of Indonesia with the Cayman is very strategic as far as Cayman is one of the world’s major financial centres. The cooperation agreements with the Cayman Islands’ Financial Reporting Authority includes the exchange of financial intelligence related to money laundering and terrorist financing.

Indonesia’s Centre for Financial Transaction Reporting and Analysis (PPATK) established October 2003 to help fight money laundering has already entered similar agreements with 17 financial intelligence agencies. The cooperation agreements provide for exchanging financial intelligence and helping to fight the terrorist financing. It is also worth mentioning that after a year of being monitored by the FATF, in February 2006, Indonesia was removed from the list of non-cooperative countries of the inter-governmental FATF.