Archive for December, 2012

Cayman Premier dismisses Allegations

Thursday, December 20th, 2012

The Royal Cayman Islands Police Service has confirmed that it has granted the jurisdiction’s Premier, McKeeva Bush bail until February to allow further investigations to take place both in the Cayman Islands and abroad in connection with the allegations made against him.

Bush was arrested on December 11, 2012, on the suspicion of theft, in connection with financial irregularities relating to the alleged misuse of a government credit card and breach of trust, abuse of office, and conflict of interest, in connection with the alleged importation of explosive substances without valid permits on or before February 2012.

Bush, who has been in public office for almost 3 decades, was questioned over 2 days by local police. He has said he plans to challenge the allegations, and rebuffed calls for him to resign from his post as Premier and Minister of Finance, Tourism and Development.

In response to the arrest of Bush, the Insurance Managers Association of Cayman (IMAC) stated that it has full faith in the Cayman Islands’ judicial system and believes in the prevalence of justice as the investigation proceeds.

IMAC added: “Cayman is a vibrant financial services centre, with robust legislation, quality service providers and an independent regulator who work to ensure that Cayman remains a preferred jurisdiction in which to do business.”

New Cayman Insurance Legislation enters into Force

Thursday, December 13th, 2012

New legislation has entered into force in the Cayman Islands with a view to establish a conducive regulatory environment for fostering the development of the reinsurance sector.

The Cayman Islands Insurance Law 2010 was passed by the island’s legislative assembly in September and has now entered into force. It creates 2 new categories of licenses:

– Class C – in relation to the provision of reinsurance arrangements financed through the issuance of catastrophe bonds and similar instruments;

– Class D – in respect of the carrying on of reinsurance business.

According to the Insurance Managers Association of Cayman (IMAC), the law will have a broader impact on the islands’ insurance industries.

The new legislation:

– abolishes the distinction between unrestricted and restricted Class B licences, instead providing for three new sub-classes of Class B licence for non-domestic insurers, based on the percentage of net premiums originating from the insurer’s related business;

– tightens the definition of the carrying on of “insurance business,” in particular removing references to contingent contracts for money;

– establishes more comprehensive annual return reporting requirements for licensed insurers, agents, managers or brokers;

– regulates transfers or the amalgamation of long-term business between licensed insurers, including requiring the approval of the Cayman Islands Monetary Authority (CIMA);

– provides for the settlement of disputes in relation to contracts of domestic insurance by way of arbitration, even in circumstances where there is no arbitration agreement in place;

– clarifies and significantly strengthens the penalties for non-compliance with the law, in order to provide a real and effective deterrent to the carrying on of insurance business without a licence, or in contravention of the terms of the relevant licence or of the law.

The amendments have been made in conjunction with substantial amendments to the Cayman Islands Immigration Law, which are intended to incentivize reinsurers and fund administrators to relocate to and establish a substantial physical presence in the Cayman Islands.

It should be added that the Insurance Managers Association of Cayman is optimistic about the introduction of the new categories of licenses, which is expected to foster substantial growth in the size of the Caymans reinsurance sector in the near future.

Muted Year for Cayman Financial Services

Monday, December 10th, 2012

The Cayman Islands’ economy grew at a slower pace than expected during the 1st 6 months of 2012, by 1.2% of GDP (gross domestic product), tracking the rate of growth seen during 2011, following a mixed year for the financial services industry.

According to the figures released by the Cayman Islands Statistics Office, the number of banks and trusts registered in the jurisdiction has declined in the 12-month period to the end of June 2012.

The number of Class ‘A’ bank & trust licenses fell by 1, to 15, while the number of Class ‘B’ licenses fell by 14, to 220 with the sector shrinking by 6% in size.

According to the Cayman Islands Statistics Office, the figures show that banking sector liquidity declined by 2.5% as foreign currency deposits fell by 5.6%, predominantly due to a fall in USD-denominated deposits by 6.3%.

The Cayman insurance sector saw nominal growth in the number of insurance licenses during the same period, by 4 (0.5%), to 758. However, the number of ‘Class A’ insurers declined by 2 to settle at 29, while Class ‘B’ (captive) licences grew by 6 year-on-year.

The number of mutual funds registered in the Cayman Islands grew markedly by 15.5%, to 10 871. However, this was as a result of the inclusion of Master Funds in the statistics, following the enactment of the Mutual Funds (Administrative) Law (2011) since last year. The size of the remainder of the mutual funds industry (registered, administered, licensed) declined by 2.9%.

The 12-month period under review has been positive for the Cayman Islands Stock Exchange, which saw a 5.1% increase in the number of listed companies in the year to the end of June 2012, and growth of 36.5% in Eurobonds listings from 85 in the same period.

New company registrations in the Cayman Islands declined by 10% over the period, to total 4 794, while foreign employment levels expanded by 1.2% to 20 158. This increase in the issuance of work permits is a substantial improvement on the 7.5% decline for the same period a year ago.

The government has revised its full-year target to 1.4% of GDP from 1.8%, taking into account stagnant growth of just 0.2% of GDP in the financial services industry.

Cayman Premier and Minister for Finance, Mr McKeeva Bush commented on the statistics: “The economy continued to post moderate growth amidst lackluster demand for financial services and the government’s commitment to responsible fiscal governance. Although, these are challenging times, the 2012/2013 Budget is focused on supporting wide-ranging stimulus measures to give all businesses the best chance of succeeding.”