Apr 2026
Onsite inspections are a key supervisory tool employed by the Cayman Islands’ financial services regulator, the Cayman Islands Monetary Authority (CIMA), to monitor regulatory compliance and assess the soundness of regulated entities including insurers. This article provides a practical overview of the CIMA inspection process, summarises CIMA’s recent thematic inspection of the insurance industry, and offers guidance on how insurers can prepare effectively for an inspection.
The CIMA Onsite Inspection Process
CIMA’s onsite inspection process follows a structured approach designed to understand the regulated entity’s business and environment and assess whether the regulated entity is operating in a sound and prudent manner and complying with applicable regulatory requirements.
The main categories of onsite inspection are:
- Full Scope Inspection: involving a full review of all lines of business areas of operations;
- Limited Scope Inspection: focusing on a particular segment of the regulated entity’s business (for example, AML/CFT/CPS and sanctions compliance, an issue raised by stakeholders or unusual results observed through usual off-site supervision and regulatory reporting); and
- Thematic Inspection: whereby CIMA conducts an in-depth review of a specific risk area for a particular sector or type of regulated entity to benchmark practices and identify areas for improvement and examples of best practice, to inform CIMA’s supervisory processes, policy development and industry guidance.
The inspection will be led by CIMA’s Onsite Inspections Unit and will likely involve the regulated entity’s supervisory division, for example an insurer’s usual contacts in CIMA’s insurance division.
Unsurprisingly, CIMA does not operate a fixed inspections schedule or provide forewarning to regulated entities in advance of an inspection.
However, depending on the size, risk profile and complexity of the business, we would expect a new licensee to be inspected by CIMA within 1-2 years of licensing.
The inspection process involves several key stages:
- Notice and Information Gathering: an inspection will begin with CIMA issuing a written notice to the regulated entity, informing it of the nature, purpose and scope of the inspection. The notice is usually accompanied or followed by a list of requests for documents and information. Requested documents typically include policies and procedures, board meeting minutes and reporting, key corporate and contractual documents, internal and external audit reports and financial and accounting information. CIMA will set a timeframe for the regulated entity to provide the requested information and documents and may give an indication of the period during which CIMA expects to conduct the onsite inspection.
- Core Onsite Inspection Process: the inspection itself usually involves a number of formal meetings held by the CIMA inspections team, either remotely or at the entity’s offices, including an opening meeting and a closing meeting, allowing CIMA to formally outline the scope, process and next steps at each stage. CIMA may also request interviews with specific individuals or functions to better understand core areas and implementation of policies and procedures in practice, for example, an insurer’s actuarial or compliance functions. CIMA may also raise further written queries and requests for information or clarification based on information gleaned from interviews or the entity’s documents. In the closing meeting, CIMA will usually flag any preliminary findings, provide initial feedback and invite any additional comments from the entity.
- Post-Inspection Reporting and Follow Up: Following the inspection, CIMA will issue a draft inspection report setting out its findings and any remediation requirements. Any deficiencies identified are categorised as either high priority Matters Requiring Immediate Attention (MRIAs) or medium or low priority Matters Requiring Attention (MRAs). CIMA will set out the severity of any deficiencies and completion dates for remediation and will monitor the entity’s progress in addressing CIMA’s findings after the inspection has concluded. The entity will be given the opportunity to provide comments on the draft inspection report before a final report is issued. For some inspections, particularly where no material deficiencies are identified, CIMA may issue a concluding letter rather than a formal report.
It is worth noting that CIMA reports by exception, so the entity will only receive findings in respect of gaps or deficiencies rather than any findings or specific feedback that reflect positive assessments of the entity’s practices as part of the onsite inspection process.
CIMA’s Thematic Inspection of the Insurance Industry
During 2025, CIMA conducted a thematic inspection of the insurance industry. The review scoped in nine insurers holding different licence classes, with a mix of product types and sizes including small, medium and large insurers.
The purpose of the thematic inspection was to consider capital and cash flow adequacy, collateral management and stress testing, risk management and mitigation and governance systems and controls. CIMA focused on identifying trends, best practices and areas for improvement for the industry. CIMA initially indicated that it planned to issue a supervisory circular to the Cayman Islands insurance industry in Q1 2026 setting out its high-level findings. We anticipate the supervisory circular will be issued shortly. The circular will not contain any identifiable features of any insurers inspected as part of the review.
In terms of CIMA inspections taking place in the next year, we understand that CIMA will be particularly focused on assessing regulated entities’ internal controls across all onsite inspections. This will include assessing how entities are identifying and managing risks, and implementing control activities such as internal reviews/checks, approvals, limits, monitoring and verification of activities and performance of duties.
Tips for Preparing for a CIMA Inspection
Insurers can take practical steps to be well prepared in advance of a CIMA inspection:
- Maintain Records of Decision-Making: insurers should hold regular board and committee meetings in accordance with constitutional documents and regulatory requirements and ensure preparation and execution of detailed and accurate minutes of board and committee meetings that document director discussions and decision-making to ensure that clear evidence of the insurer’s practices and governance can be provided to CIMA at an inspection.
- Review and Update Documentation: Upon receipt of an inspection notice, insurers should carefully review the documentation requested by CIMA and take proactive steps to identify and address any gaps or deficiencies. Whilst this may not change CIMA’s inspection findings, this will demonstrate responsible engagement and assist the insurer to address any potential remediation early.
- Engage Legal Counsel Early: input from legal counsel at an early stage in the process can assist with meeting CIMA’s requests on a fulsome and timely basis and ensuring that regulatory expectations are understood and complied with. Legal counsel can advise on or assist with the preparation of written responses, feedback or commentary to be submitted to CIMA at any stage of the process.
- Review Prior Thematic Reports: Aggregated data and feedback gathered from CIMA’s thematic inspections is published in periodic reports on CIMA’s website, setting out key themes, good practices and bad practices observed by CIMA (including recent thematic reports on AML/CFT/CPF and outsourcing). These reports can serve as useful indicators of CIMA’s regulatory expectations and assist insurers in preparing for inspections.
- Ensure Policies Are Implemented in Practice: Given that CIMA’s interviews with staff are often designed to determine whether policies and procedures are actually being implemented in practice, insurers should ensure that relevant personnel are familiar with and can speak to the insurer’s processes and controls.
- Respond Promptly to Queries: CIMA expects licensees to respond to queries in a timely manner during the inspection process. A responsive and cooperative approach will assist a smoother inspections process and aid mutual understanding between the insurer and its regulator.
Conclusion
Since CIMA’s onsite inspection process is a fundamental component of its supervisory function, the question for insurers is not whether but when they will be inspected by CIMA.
By understanding the inspection process, staying informed of CIMA’s regulatory focus areas, and taking proactive steps to prepare, insurers can navigate the inspection process efficiently and effectively. In particular, we recommend that insurers review their internal controls (including any internal audit activities) in the near future. The Conyers team can assist with any gap analysis, policy reviews or advice on implementing policies and procedures in line with regulatory obligations.