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ARTICLE · 28 JULY 2022

Legislative Recognition For Capital Redemption Contracts, Aka Funding Agreements

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On Tuesday 28 June 2022, the Insurance (Amendment) Act 2022 (the "Amendment") was published in the Official Gazette having been brought as a bill before the Cayman Islands...

Cayman IslandsInsurance
Derek Stenson
Derek Stenson
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On Tuesday 28 June 2022, the Insurance (Amendment) Act 2022 (the "Amendment") was published in the Official Gazette having been brought as a bill before the Cayman Islands Parliament during its third meeting of the 2021-2022 session. The Amendment is targeted at giving a legislative footing for the first time in the Cayman Islands to 'capital redemption contracts' (also known in certain other jurisdictions as 'funding agreements').

These have been popular for some time in places like the UK, EU and US. The Amendment is the product of efforts by the Financial Services Legislative Committee (the "FSLC") – a public/private body comprising representatives of the Ministry of Finance and the Cayman Islands' financial services industry set up in 2011 – to diversify the Islands' insurance and reinsurance sector. The FSLC proposes and helps draft legislative enhancements to the Cayman Islands financial services regime for Government's consideration and potential action, and

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