The Cayman Islands will file for US Qualified Jurisdiction status before the end of June, Premier Andre Ebanks told the ReConnect 2026 reinsurance conference on Friday, setting the first public deadline for a long-signalled bid to put the island on the US insurance industry’s short list of regulators treated as “comparable” to home-state supervisors.
Qualified Jurisdiction status is awarded by the US National Association of Insurance Commissioners (NAIC) to non-US supervisors whose regulatory standards it judges comparable to those of US state insurance departments. This would strengthen Cayman’s position as a leading global reinsurance centre and reinforce access to US insurance markets. It could also in certain cases reduce collateral requirements on US-facing reinsurance for qualifying reinsurers.
Premier Ebanks’ announcement, alongside news that the cabinet has issued drafting instructions allowing the Cayman Islands Monetary Authority (CIMA) to pay higher salaries to attract and retain technical staff, and to open the door to private-sector secondments and outsourced expertise, was the political and regulatory centrepiece of a two-day conference.
ReConnect’s many expert panels, in turn, underlined the reason why a growing number of reinsurers, particularly in life and annuity, have chosen Cayman as a domicile.
Reserves overhauled, but offshore attraction holds
Despite new reserving rules for US life and annuity providers, a panel of actuaries at the conference did not believe that demand for offshore reinsurance would diminish dramatically.
The US National Association of Insurance Commissioners’ new VM-22 framework, which took effect on 1 January, moves the valuation of non-variable annuities away from a formulaic, worst-case regime towards a principle-based economic reserve. Karen Grote, a managing director at WTW and a specialist in US pension risk transfer, described the change as “a huge shift in the US statutory reserve paradigm”.
Her firm, she said, had modelled VM-22 across a range of products; fixed-indexed annuities with guaranteed lifetime withdrawal benefits were likely to see the clearest reserve relief, though other blocks had shown little change or even a modest uptick.
A frequently asked question by clients is whether the change will decrease the need for offshore reinsurance. “If I had to boil it down to yes or no, I’m going to say no.” Reserve release, she added, was only one piece of a much bigger puzzle, and the drivers of offshore reinsurance ran far wider than statutory arbitrage and there were still some constraints imposed by VM-22.
A less-discussed consequence of the new regulation would, in fact, push the other way: trust and collateral accounts had been “very prescribed, pretty consistent, easy to predict”, but that would “not be the case going forward”, making reinsurance structures that actively manage that volatility more, not less, attractive.
VM-22’s companion disclosure regime, Actuarial Guideline 55, requires US cedants to lay out the reserves, assets and cash flows underlying their reinsured business. Paul Fedchak, a Milliman consulting actuary who signs off on three Cayman companies, presented it as proactive supervision that like most new regulation was born out of a lack of transparency.
Yiping Yang, chief actuary at Urban Lake Life Insurance Company, said AG 55 would give regulators the post-reinsurance economic picture they had been missing. “I believe these regulatory changes will encourage the companies to look at their reinsurance opportunities in a more comprehensive way,” she said.
Lloyd Balshaw, appointed actuary at Oceanview Re, argued that much of what AG 55 demands was already standard on the island. “From the Cayman actuary’s perspective, [AG 55] can feel like a bit of a compliance exercise,” he said, “but that additional collaboration and work that comes out of it is, I think, a really good thing for the market to enjoy.”
As far as the broader debate about the regulatory standards of the Cayman Islands is concerned, Balshaw said, much of the recent media headlines in coverage of the jurisdiction came from “parties with ulterior motives” whose framing was very different to “the actuarial rigour and reality and structure that exists on the island”.
CIMA outlines its risk- and principle-based regime
George Kamau, deputy head of the insurance supervision division at CIMA, walked delegates through the mechanics of the supervisor’s risk-based and principle-based regime.
“If you check our regulatory framework, the majority of it is built around the international standards issued by IAIS,” Kamau said, noting that any revision at the International Association of Insurance Supervisors was “likely to trigger some changes here in the Cayman Islands as well”. Every internal capital model, he said, is examined in detail by CIMA’s in-house actuarial team, tested against a published set of quantitative and stress requirements, and subjected to periodic revalidation. CIMA “may approve the model as presented, if it’s found to be fit for purpose”, but can also demand amendments or reject a submission outright.
On the asset side, the area that has drawn most US scrutiny, Kamau said the authority had “the power to disallow or prohibit certain asset classes” or cap the percentage of a portfolio invested in a particular class, “particularly when it comes to alternative investments”.
He also underlined a point that is often ignored: most US-Cayman reinsurance is written on an asset-withheld basis, so the investment portfolio sits with the US cedant and must satisfy both CIMA and the cedant’s state regulator.
Business model first, jurisdiction second
Stephan Muecke, chief executive of American Reinsurance Company, said on the same panel on offshore reinsurance jurisdictions, he had evaluated the Cayman Islands, Bermuda, the UK’s Channel Islands, Malta, Ireland and US onshore before choosing Cayman. He argued the test was “whether it fits the business model, and not the other way around”. He boiled the choice down to four factors: market fit, credibility of regulatory oversight, execution capability and tax efficiency for non-US investors.
“I’m not talking about capital arbitrage or regulatory arbitrage,” he said. “I’m talking about whether the jurisdiction allows you really to build a business that is scalable, that is reliable, that allows you to go after the liabilities that you’re targeting.” Cayman had won out, he added, because its segregated portfolio company (SPC) structures let him target the US asset-intensive market while offering a tax-efficient product to international investors.
In terms of capital models, Muecke said his firm currently used US RBC because it was the framework his US cedants and their regulators knew best. However, the Cayman SPC structure allowed each new portfolio to select its own capital and reporting framework, so in terms of accounting standards, he could deploy IFRS for international business and pick a different basis again for the next cedant.
KPMG senior partner Ilene Kohlun argued that boards should reframe their approach to the choice. “Boards most often ask, what is the capital answer? What will my capital ratios look like?” she said. But they don’t ask enough questions about what jurisdiction would be best for the structure or the transaction. Directors should drop the simple onshore-versus-offshore binary. “Onshore in the US can do many things, but states have their permitted practices, so onshore with Ohio or Iowa might not be the same as onshore with New York.”
Those permitted practices, bespoke departures from statutory accounting, reduce the gap between onshore and offshore for certain transactions, and amount to competition for Cayman, panellists agreed.
“I see it as competition, but definitely not a replacement,” said Kohlun. A permitted practice sitting beneath another insurance company from another state could be unwound if the parent state disagreed, she noted, and not all cedants are uncomfortable with the approach.
Jeremy Trader, co-head and chief actuary at reinsurer Knighthead, said, “There is no single best framework. There are pros and cons, and there are limitations to each framework.” To evaluate those tradeoffs against the specific business model “is what we need to focus on as an industry,” he added.
