Offshore Advantage

OFFSHORE REINSURANCE FOCUS

TARTAN RE selected the Cayman Islands for its operation and headquarters primarily for its credibility in the reinsurance industry. In 2019 the total number of new insurance and reinsurance entities exceeded the combined new registrations for Cayman Island and Vermont. Here are the significant reasons for selecting the Cayman Islands:

Special Economic Zone (SEZ) Law - This Law, which specifically caters to exempted companies and exempted limited partnerships, creates an alternative licensing regime, as well as, a number of additional incentives for entities that have already established, or wish to establish, a physical presence in the Islands. Some of these appealing governmental concessions are:

• Companies are also exempt (subject to certain conditions) from any liability or obligation to pay any direct or indirect taxes, import or other duties, or fees (including in respect of registration, filing, employment, profits, income, gains, appreciations, transfers, assets, property, real estate, planning consents, gifts, estate duty, stamp duty, inheritance, import, export, or otherwise, with specific exemption from import duty on branded stationery, marketing materials and related paraphernalia of SEZ enterprises that may be, are, or are to be levied by or on behalf of the Government between now and the end of the 2061 calendar year.
  
  

• An attractive feature of setting up within the SEZs is the bundling of most, if not all, of the regulatory costs attached to carrying on business in and from the Cayman Islands into a single fee payable to Cayman Enterprise City.
  
  

• Another attractive benefit is the speed and ease at which companies can be set up within their respective zones. Work visas can be granted in 5 days and businesses can be set up and fully operational in 4-6 weeks. Solvency II - The main differentiator between Cayman and Cayman Island, for instance, is that Cayman Island chose to establish equivalency with Solvency II, a European regulatory framework that determines capital requirements and governance for insurance and reinsurance companies primarily in Europe. Cayman, on the other hand, did not pursue equivalency, mainly because 90 percent of the insurance business in Cayman comes from the United States. Many reinsurers in the Cayman Islands also have a subsidiary specifically subject to the Solvency II-equivalent regulation. Thus, the Cayman Islands are the best of both worlds . . . Clearly a differentiating feature for the Cayman Islands jurisdiction!
  
  

The Regulator - The regulatory environment is another distinctive factor in Cayman because it is comparatively commercial, market-facing and innovative, the legal and regulatory framework “high quality” and “sensible,” as well as “robust” and “flexible within reason.”

Funds Nexus - Cayman’s history and experience in the funds industry is equally important. The strength of the funds industry means that Cayman is uniquely placed to participate in many of the latest developments on the reinsurance side.Having an established funds industry also means that the professional talent on island is first rate and world class and there is a recognition of and familiarity with Cayman among investors around the world.