Southport Re (Cayman) Ltd. has changed its captive insurance status to become the second reinsurer in the Cayman Islands.

Southport Re, the reinsurance unit of New York-based private equity firm Southport Lane Management L.L.C., is the fist insurer in the Cayman Islands to change its Class B captive license to that of a Class D open-market reinsurer license under the domicile's recently amended law, the company said Wednesday in a statement.

Class B licenses are for captive insurers with self-insurance and some direct commercial insurance programs, Gordon Rowell, head of insurance division for the Cayman Islands Monetary Authority, said in an email. The Class D license category was developed specifically for commercial reinsurers.

The amended law, enacted in November 2012, established new categories of licenses for insurance-linked securities and reinsurers, among others, he said.

The capital requirement to obtain a Class D reinsurer license is $50 million, and “switching categories is just a matter of meeting the various requirements of a specific category,” Mr. Rowell said.

Both types of licenses are regulated by CIMA, but Class D reinsurers are further required to maintain a place of business in the Cayman Islands, Southport Re said in a statement.

The amended insurance law enables the domicile to effectively regulate risks inherent to different licensees in the market, CIMA Director Cindy Scotland said in the statement.

“This is a key reason for differentiating between captives and reinsurers,” she said.

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“Southport Re's decision to migrate from a Class B to a Class D insurer underscores our strength and competitiveness in our reinsurance sector,” Dax Basdeo, chief officer of the Cayman Islands' Ministry of Financial Services, said in the statement.

Southport Re is “delighted to be the first Cayman insurer to receive this new classification,” Glenn Weber, CEO of Southport Re, said in the statement. “Southport Re continues to view Cayman as an attractive location for our reinsurance business.”

Greenlight Capital Re Ltd. is the only other reinsurer based in the Cayman Islands, Mr. Rowell said.

Reinsurers on the island focus on risks varying from longevity risks to residual value and more traditional property risks, he said.