Aug 2020
A very warm welcome to our second issue of Conyers Coverage. This issue focuses on the recent introduction of a number of legal and regulatory measures affecting the insurance industry. Among a number of items, Rob has prepared a great piece on the material roll out of CIMA’s administrative fines and penalties regime as it applies to insurance licensees; Pip, who we profile this issue, provides an update on economic substance and we have some further updates including on the registration of private funds in Cayman which is intrinsically linked to the removal of the Cayman Islands from the EU’s list of un-cooperative jurisdictions. There has been quite a lot happening as of late so we hope these updates are helpful. Please reach out any time to one of the team for any clarifications or specific assistance needed.
As always, we welcome your comments or article suggestions for future issues, and please do not hesitate to get in touch if you would like to contribute to future editions of Conyers Coverage.
Cayman Islands Administrative Fines Regime for Insurance Licenses
The Administrative Fines Regime has been rolled out so it is therefore important that all persons regulated under the Insurance Law, including insurance managers and their client (re)insurers, understand and comply with all filing deadlines, ongoing notification obligations and maintain appropriate systems and controls in accordance with applicable regulatory laws and Authority guidance issued from time to time.
The Private Funds Law and the Cayman Islands’ Status with the EU:
It has been a hectic Summer for the Cayman Islands fun industry given the roll out of the Private Funds Law. We include a status update here.
Economic Substance Law Update:
With the 30 June 2020 deadline for filing the Economic Substance Notification having now passed, focus has shifted to the upcoming filing of the Economic Substance Return ({ESR”) via the Tax Information Authority’s (“TIA”) portal. All insurers will be required to demonstrate satisfaction of the economic substance test by filing an ESR, save for insurers which are tax resident in the US or elsewhere outside the Islands which are only required to provide evidence of their tax residency by filing a “Form for entity tax resident in another jurisdiction” via the TIA portal. It is expected that the TIA portal will become active in Q3 2020, with the first tranche of filings due on or before 31 December 2020 for insurers with a 31 December financial year end.
On 13 July 2020, the long awaited third version of the Economic Substance Guidance was released, which in particular, provides additional colour on the core income generating activities for insurers. It is expected that for of the ESR once made available will give additional useful guidance on the information which will be expected to be provided by client insurers in order to demonstrate their compliance with the three elements of the economic substance test.
Insurance Managers and other outsourced service providers on whom client insurers will be seeking to rely on to establish substance in the Cayman Islands will also be required to lodge a “Form of Outsource Service Providers” via the TIA portal to enable the TIA to verify the outsourced services detailed in the ESR.
Cybersecurity Requirements for Licenses
Entities regulated under the Insurance Law will need to implement cybersecurity measures in proportion to their cyber risk profile by 27 November 2020 following the release of the Rule and Statement of Guidance on Cybersecurity for Regulated Entities by the Cayman Islands Monetary Authority on 27 May 2020.
GDPR and the Cayman Data Protection Law for Insurance Managers (and clients)
Cayman has sensibly decided to follow suit with the EU and numerous other jurisdictions around the world by enacting its own data protection regime, The Cayman Islands Data Protection Law, largely in line with the data protection principles set out in the GDPR.
Meet the team: Philippa Gilkes
Philippa (also known as Pip) joined Conyers insurance team in 2019 and specializes in insurance regulatory work.
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