The Cayman Islands has given itself a June deadline to apply for a US regulatory designation that would put its reinsurance sector in the same league as Bermuda, Premier Andre Ebanks (pictured above) said Friday, formally launching a qualified jurisdiction status (QJS) bid the territory has been weighing for years.
Only seven jurisdictions hold qualified jurisdiction status from the National Association of Insurance Commissioners: Bermuda, France, Germany, Ireland, Japan, Switzerland and the United Kingdom. The list has not changed since 2015. Cayman would be the eighth.
The designation allows reinsurers in approved jurisdictions to post reduced collateral when transacting with US cedents.
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Ebanks, who doubles as Minister for Financial Services, made the announcement at CIRCA's annual ReConnect conference, describing the Cayman Islands' value proposition as offering "fresh, well-regulated capital to underserved markets."
Filing is only the beginning. When Bermuda became the first jurisdiction to pursue QJS in 2013, NAIC and BMA records show conditional approval took roughly 16 months, with full status following a year later. A comparable timeline would put Cayman's approval no earlier than 2028.
The Cayman Islands Monetary Authority is staffing up accordingly. The Ministry of Financial Services has posted for a reinsurance specialist to steer the application, and the Cabinet this week approved draft legislation allowing CIMA to set salaries outside the civil service pay scale to compete for regulatory talent.
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Ebanks said he also expects public-private secondments and external consultants to support the effort.
The bid arrives at a delicate moment. S&P Global reported that US insurers had ceded more than $1 trillion in liabilities to offshore reinsurers by end-2024, prompting state-level scrutiny over disclosure and asset-backing standards.
Adrian Lynch, CEO of Blue Ocean Reinsurance Group, has previously pushed back, noting Cayman reinsurers typically post 103% to 105% of US statutory reserves as collateral. He called the QJS pursuit a signal of regulatory confidence.
Ebanks acknowledged the pressure, urging the private sector to sharpen its responses on valuation practices, transparency and how CIMA classifies its reinsurance licensees.
QJS has historically been granted only to specific classes of insurer, as Bermuda's case illustrates, meaning CIMA's supervisory framework will face granular NAIC review.
US regulators had been direct about their expectations, Ebanks said: "To know without a doubt that if something goes wrong, the framework is the same as it would be for them in their state."
Reinsurance has been formalized as a budget objective under the current coalition government, he added, citing a "sustained uptick" in the sector. Whether the territory can convert that momentum into approval will depend as much on regulatory preparation as political will.
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