Sep 2026
In June 2026, the Cayman Islands Monetary Authority (CIMA) published the results of a thematic review of a sample of reinsurance companies holding Class B(iii) and Class D licenses. The review, conducted between mid-2025 and the first quarter of 2026, assessed compliance with The Insurance Act, 2010 (as revised) and related regulatory framework, while also evaluating alignment with recognised industry standards. While the review examined stress testing, cash flow testing, and capital and collateral adequacy management, the headline finding was unmistakable: corporate governance weaknesses accounted for a striking 68% of all deficiencies identified. For boards and management teams across the reinsurance sector, the report delivers a clear message: governance fundamentals demand renewed attention.
Board Oversight and Accountability
A persistent theme throughout the review was insufficient board oversight with 20% of all corporate governance weaknesses relating to boards failing to clearly define or document the roles and responsibilities assigned to directors. CIMA also found insufficient evidence from board meeting agendas and minutes to confirm that directors were receiving and reviewing key risk reports. In some cases, entities were not even convening formal board meetings, which accounted for 7% of the governance findings. A further 7% of deficiencies stemmed from boards not conducting periodical self-assessments of their own performance.
CIMA’s recommendations on this front are clear: boards must establish well-defined roles and responsibilities for their members, hold regular and formally documented meetings with comprehensive meeting minutes, and conduct periodic self-assessments to ensure accountability and identify weaknesses in governance processes.
Sub-Committee Governance
Sub-committee governance was the joint-largest area of weakness, also representing 20% of the corporate governance findings. CIMA observed that several entities could not demonstrate that sub-committee meetings had taken place, while others failed to maintain appropriate documentation. In some instances, Audit Committees were not effectively fulfilling their duties in accordance with their charters and relevant regulatory requirements, and certain committees operated without charters altogether.
This is a reminder that a well-functioning committee structure is not merely a box-ticking exercise. Boards should ensure that committee mandates are appropriately documented, consistently applied, and subject to regular review.
Segregation of Duties and Internal Audit
The review found that 13% of the corporate governance findings involved inadequate segregation of duties, including situations where a single individual held multiple roles, such as pricing and approval of reinsurance treaties, without appropriate safeguards. An equal share of findings related to the lack of an effective internal audit function to ensure ongoing monitoring of internal control systems.
CIMA recommends that regulated entities establish independent review mechanisms for internal control systems, including through periodical internal audits (by an in-house function or alternatively outsourced to a third-party provider). These findings underscore the importance of structural controls to mitigate conflicts of interest and provide assurance over key risk areas.
Outsourcing and Service Provider Oversight
The review found an additional 13% of governance weaknesses related to the absence of formal contractual agreements between entities and their service providers, which undermined the framework for oversight, accountability, and enforceability of outsourced functions. CIMA expects entities to ensure complete documentation of key records, including the execution and periodical assessment of material outsourced arrangements in accordance with the Statement of Guidance on Outsourcing.
As reinsurance companies increasingly rely on service providers for critical functions to supplement services provided by the insurance manager, establishing robust contractual and monitoring frameworks is key to complying with regulatory expectations and protecting the interests of the reinsurer.
What Good Governance Looks Like
The report was not solely focused on deficiencies. CIMA also recognised good practices among entities, including the establishment of comprehensive risk management frameworks, documented risk appetite frameworks guiding the review of reinsurance treaties, periodical reporting to the board on financial performance and capital adequacy, and compliance with regulatory requirements for the approval of material business plan changes.
Looking Ahead
CIMA’s concluding remarks emphasise that regulated entities are expected to maintain policies, procedures, systems, and controls that are appropriate, effective, and proportionate to the nature, scale, and complexity of their business. Importantly, reinsurers must recognise that what was fit for their purpose upon their commencement of business may no longer be suitable, 1, 3, or 5 years down the track. With corporate governance dominating the landscape of identified weaknesses, boards and management teams should treat this report as a catalyst for meaningful governance enhancement to rectify deficiencies in their own frameworks to ensure such are not picked up in a CIMA inspection. The Authority’s willingness to engage directly with entities on remediation suggests that proactive steps taken now will be viewed favorably.
How Conyers Can Assist
For reinsurers looking to respond to the findings of this thematic review or to get ahead of the next review or inspection Conyers can help you turn regulatory expectations into practical, embedded governance improvements. Conyers works alongside boards and management to build governance frameworks that not only satisfy CIMA’s requirements but also strengthen decision-making, accountability and operational resilience.
Conyers’ corporate secretarial services are designed to ensure your board operates with the formality and documentation that aligns with corporate governance best practice and CIMA’s expectations. From preparing meeting agendas and board packs to coordinating meetings and drafting minutes, the team helps your board maintain a clear, contemporaneous record of oversight and decision-making directly addressing the documentation gaps that featured prominently in the review.
Conyers also works with boards to develop charters and governance policies that clearly define mandates, roles, and responsibilities at both the board and committee level. The result is an accountability framework that gives directors confidence in their oversight structure and demonstrates to CIMA that governance is embedded, not improvised.
For entities that rely on outsourced service providers, Conyers prepares services agreements that comply with CIMA’s Statement of Guidance on Outsourcing, helping reinsurers establish the formal contractual and monitoring framework needed to manage third-party risk effectively and satisfy your regulatory obligations.
More broadly, Conyers provides advisory services to boards on their governance obligations and the discharge of fiduciary duties, equipping directors with the clarity they need to navigate an evolving regulatory landscape with confidence.