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CIMA Report Shows Growth In Cayman Offshore Sector

by Amanda Banks, Tax-News.com, London

07 December 2006


The Cayman Islands Monetary Authority's (CIMA) annual report for the year to the end of June 2006 has shown that the Cayman Islands remain an increasingly attractive jurisdiction for mutual funds, captive insurance and banking.

The report records that during the 2005-06 fiscal year, the number of active mutual funds regulated by the Authority grew by 20% to 7,845 funds at 30 June.

Meanwhile, captive insurance licences (held by entities writing non-domestic business only) increased 4% to 737, with Cayman experiencing the largest net growth among all captive domiciles, with a net increase of 40 captives.

In the banking sector, while the total number of banking and trust licences declined by 6% (19 licensees) to 296, due mainly to continuing consolidations worldwide, the assets and liabilities of licensees continued to increase. Total international assets booked through banks in the Cayman Islands stood at US$1,413 billion at 30 June this year, a 12% increase over the same date last year. Liabilities at 30 June totalled US$1,373 billion, a 10% increase over 30 June 2005.

CIMA said that it collected a total of $54 million in licensing fees on behalf of the Government as at 30 June 2006, compared to $47 million for the previous fiscal year. Total income for 2005-06 was $17.5 million and expenses totalled $11.7 million, resulting in a net income of $5.8 million. This compares to a net income of $2.4 million for fiscal year 2004-05, when total income was $12.5 million and total expenses were $10.1 million.

The report also outlined CIMA’s efforts to address local consumer issues, particularly those that arose in the insurance sector in the aftermath of Hurricane Ivan, leading to the development of a number of regulatory measures during the year.

Among these developments was the CIMA-private sector Insurance Law Working Group, which completed its review of the law and recommended to the Cabinet the need to increase protection for policyholders of approved external insurers, and to increase the accountability of unlicensed insurers and the brokers who represent them.

CIMA also developed a Statement of Guidance on Market Conduct for Class A Insurers and Agents to formalize standards that domestic insurers and agents should meet in dealing with the public, worked with the Cayman Islands Insurance Association on the development of a code for insurance brokers, and has been in discussion with representatives of the CI Bankers Association over the development of a code of market conduct for bankers.

The report also showed that CIMA processed over 100 requests for assistance from overseas regulatory authorities, while memoranda of understanding and other information exchange agreements were negotiated with authorities in Canada, Brazil and the USA.


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