5 Straightforward Steps to Starting a Cayman Captive

Timothy L. Coomer, Ph.D.

In the 1993 movie, The Firm, Tom Cruise plays the part of Mitch McDeere, a young lawyer who naively joins a law firm that is less than reputable. Mitch’s adventure leads him to the Cayman Islands, where you are led to believe all “bad” money goes to find a home. This type of representation of the Cayman Islands is a common movie theme – and certainly doesn’t support the mission or image of this great captive domicile.

Our experiences here at SIGMA with Cayman, the regulators, captive managers, auditors, and captives we work with, has been impressive and professional during our twenty years of interactions with this domicile.

My purpose in this blog is to remove any mystique or hurdles that may be preventing you from considering putting one of your clients into a Cayman captive. Cayman’s laws and regulations are very favorable for US based companies. The captive managers in Cayman offer efficient and cost-effective solutions.

To consider a captive option domiciled in Cayman here is what you should do:

  1. Hire an actuary to complete a projection of losses under various scenarios and loss retentions. This is the most important piece of information you will need to decide if the captive is a viable loss financing alternative. SIGMA is qualified to complete this step for you.
  2. With your actuarial analysis completed, SIGMA will identify two captive managers that we believe are a good fit for you and your client. We travel often to Cayman and have close working relationships with most of the captive managers on the island. We also work on a regular basis with auditing firms and regulators. SIGMA’s extensive network in Cayman will significantly reduce the time it takes for you to connect with the right service providers.
  3. SIGMA will schedule two phone calls for you, one with each of the captive managers we have recommended. We will set up the call and be on the call with you.
  4. We will help you complete a net present value comparison of the captive option along with other loss financing options.
  5. If you and your client’s final decision is to form the captive, SIGMA will work with you, the captive manager, and your client to build the analytical framework to closely monitor the performance of the captive going forward.

There is no mystery about forming a captive in the Cayman Islands. It is a viable option that you should offer your larger clients.

Please contact us or click the link below to schedule a call to discuss further.

Schedule a call with SIGMA

2 comments on “5 Straightforward Steps to Starting a Cayman Captive”

  1. Considering the note below, please make sure we are on your list of Cayman Managers! Thanks:

    Beecher Carlson provides its clients with first-class captive services at competitive rates. As one of the world’s leading captive managers, our captive management and consulting practice is proud to have been recognized by Captive Review magazine for our innovative approach to captive management, excellence in customer care, and twice as Captive Manager of the Year since the inception of the award in 2012.

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