The Companies (Amendment) (Segregated Portfolio Companies) Law 1998 was recently passed and incorporated as a schedule to the Companies Law. The new legislation will affect only those companies which undertake captive insurance business in the Cayman Islands and hold an Unrestricted Class B Insurers Licence issued under the Insurance Law.
A qualifying company may apply to the Registrar of Companies for registration as an exempted segregated portfolio company (SPC). An SPC may create one or more segregated portfolios to segregate the general assets and liabilities of the company held within or on behalf of the portfolio or the assets and liabilities held on behalf of other segregated portfolios. The SPC will be a single legal entity and each segregated portfolio will need to be a separately identified and designated segregated portfolio.
Agreements entered into by an SPC on behalf of a segregated portfolio must be executed by the SPC for and on behalf of the segregated portfolio, failing which the directors may incur personal liability. Segregated portfolio assets will only be available to meet the liabilities to the creditors of the SPC who are creditors in respect of the segregated portfolio in question.