Category: Comparative markets · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-05
The Cayman Islands captive insurance market is the second-largest captive insurance domicile in the world by premium volume, after Bermuda. It is particularly strong in US healthcare captives, group captives, segregated portfolio companies (SPCs), and reinsurance for the global asset management industry, regulated by the Cayman Islands Monetary Authority (CIMA) under the Insurance Act 2010.
Category: Comparative insurance markets Jurisdiction / Domicile: Cayman Islands (British Overseas Territory) Regulator: Cayman Islands Monetary Authority (CIMA) Founding statute: Insurance Act 2010 (Cayman); originally Insurance Law 1979 Related concepts: Captive insurance company, Bermuda insurance market, Cayman ILS
The Cayman captive market emerged in the late 1970s following the Insurance Law 1979 and grew rapidly as US corporations and physician groups sought a domicile combining low tax, sophisticated infrastructure and proximity to the US market. As at recent reporting, Cayman hosts approximately 670 captives with combined gross written premium of approximately $15 billion. The market is particularly dominant in US healthcare captives — a function of the structural risks in the US medical liability market — and in group captives for SME industry verticals.
The principal statute is the Insurance Act 2010, which replaced the Insurance Law 1979. Captive insurers are classified principally as Class B insurers (Class B(i), B(ii), B(iii)) by reference to the proportion of related-party business written. The Segregated Portfolio Company (SPC) regime, introduced by the Companies Act, provides cell company structures equivalent to (but distinct from) the Guernsey PCC. Solvency regulation is risk-based, with capital requirements calibrated to the nature of the underwritten risk.
A typical Cayman captive is a single-parent Class B(i) insurer (only related-party business) writing US workers’ compensation, professional liability, or general liability for the parent corporate group. Group captives — particularly for physician practices, US hospital systems, and trade-association sponsored captives — operate as Class B(iii) (more than 50% unrelated business) and may be structured as SPCs with separate cells for each participating member. Cayman captives frequently reinsure into Bermuda, the United States, or directly into commercial reinsurance.
The UK does not have a developed captive insurance domicile regime; UK captive owners typically domicile their captives in Guernsey, Isle of Man, Cayman, or Bermuda. The PRA’s Solvency UK framework imposes higher capital and reporting requirements than Cayman, making the UK uncompetitive for captive domiciliation outside the very largest direct insurance group structures.
A US healthcare system captives its medical professional liability exposure in a Cayman Class B(i) single-parent captive: the captive writes a $10m primary layer, reinsures $90m of excess to a Bermuda excess writer, retains $2m of net exposure per claim. The captive structure allows the group to retain underwriting profit and manage volatility, with significant US tax considerations under IRC §831 and the Lloyd’s of London / Bermuda reinsurance market providing efficient access to excess capacity.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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