The insurance business offshore is growing rapidly and this is the case in the Cayman Islands. There are over 400 licensed insurance companies in the Cayman Islands; on the other hand, none of them has any offices on the islands. There are around 25 licensed insurance managers.

The way in which insurance companies are formed in the Cayman Islands is under the Companies Law. After this is done, then there must be an application made under the Insurance Law. Next, the Monetary Authority reviews the proposal, the adequacies of the reserves, and other pertinent information. The Monetary Authority will then give either clearance or reject clearance for them to conduct insurance.

Insurance companies also have to have audited annual statements just as mutual funds and the auditors have to notify the Monetary Authority if they see any type of problems during the auditing process.