How to Form a Captive

How to form a captive


The procedure for formation and licensing of captive insurance companies can be straightforward.

Once the decision is made to make use of CSI International Underwriting (Cayman) Ltd. (“CSI”) as Insurance Manager the following are the typical steps to set up a captive insurance or reinsurance company in the Cayman Islands:

1. Work with CSI on initial feasibility analysis for the new captive program, including looking at variables needed for the business plan such as risk retention levels, types of coverage and limits of coverage.

2. Negotiate fronting and reinsurance arrangements (if necessary)

3. CSI to meet and discuss the proposed captive program with the Cayman Islands Monetary Authority (“CIMA”) (if necessary)

4. License Application to be prepared with assistance from CSI. The License Application will include the following:

  •     The completed License Application form
  •     Business Plan
  •     Financial projections for a three-year period
  •     The acceptance letters from the Insurance Manager (CSI) and Auditor in the Cayman Islands
  •     A Letter of Undertaking as to the minimum capital (usually from shareholder)
  •     The Personal Questionnaire, references and due diligence documents as required for each manager, shareholder, director and officer.

5. Meet formally with the Insurance Supervision Division of CIMA to present and discuss the proposed captive program

6. Submit the completed License Application to CIMA

7. The captive can be licensed in 2 to 6 weeks depending on the speed and availability of requested information and documents.

The actual registration of the company is organised through the Registrar of Companies. Registration of the Company is immediate on filing of all documents with the Registrar of Companies, the Certificate of Incorporation and stamped M&A usually being issued within 3-5 working days. Registration is usually only done after the Insurance License has been approved in principle. Corporate management and administration services will be provided by Cayman Management Ltd., an affiliated company management firm.

For more information on how to form a captive please contact CSI International Underwriting (Cayman) Ltd. Through all stages of captive formation and management we can provide expertise to companies looking to operate in the Cayman Islands.