GRAND CAYMAN, B.W.I.-The Cayman Islands government has created a Monetary Authority to oversee insurance and banking services-though the new unit may not have as much independence as originally anticipated.

Start-up of the Monetary Authority at the beginning of the year also coincides with changes in key personnel overseeing the islands' insurance operations.

William McCullough has been appointed to the new post of Head of Insurance Supervision, a position he took up Nov. 1, 1996, filling a void created in July 1996 when John Darwood, the island's deputy inspector of insurance since 1993, left to become senior adviser in the Insurance Division of the Guernsey Financial Services Commission.

Mr. McCullough, a native of Northern Ireland, has held a number of posts in insurance brokering, underwriting and supervision around the world since 1976. His most recent position was general manager of a Commercial Union Assurance Co. P.L.C./Swiss Reinsurance Co. joint venture company in Saudi Arabia. Prior to that, he was the insurance regulation and supervision adviser in Bah-rain.

Between Mr. Darwood's departure and Mr. McCullough's arrival, the Cayman Islands' insurance supervision was overseen by John Mantz, formerly chief analyst in the Cayman Insurance Department.

Mr. Mantz had been expected to succeed Mr. Darwood, but he left the department when his contract expired.

Mr. Mantz's replacement as chief analyst in the insurance department is Christopher Collins. He has worked in the insurance industry in senior executive roles in Europe, South America and the United States.

Mr. Collins said his additional background in fund investment will be helpful, as this area is becoming "increasingly important in Cayman as local companies become more sophisticated in investing activities."

Those involved and the Cayman Islands government emphasize the personnel changes were entirely a result of expatriates deciding not to renew contracts, mainly so they could return home.

Mr. Darwood, who already had twice extended his contract with the Cayman Islands since 1994, had made it clear last year that he wanted to return to England.

In creating the Monetary Authority, which had been planned since at least last year, the Cayman Islands government has disbanded the Financial Services Supervision Department, which oversaw insurance and banking, and created a wider-spreading unit that will oversee banking, insurance, mutual funds, management companies, the Cayman's Currency Board, and the islands' new stock exchange, which started up this year (BI, April 22, 1996).

However, the authority is only semi-autonomous, rather than fully autonomous, as the government had originally envisaged.

The result is that the authority will not have final say on insurance regulatory matters, but will have to defer to the government.

Anthony Stelling, a director with Midland Bank Trust Corp. (Cayman) Ltd., doesn't see this as a problem.

While Mr. Stelling thinks it will take about six months before the Authority's record can be judged properly, he says semi-autonomy should not make any difference.

"There is no conflict between the Monetary Authority and the government when it comes to issues that involve the private sector" in insurance regulation, he said.

Meanwhile, Guernsey is hoping the expansion of its insurance regulatory team with the addition of Mr. Darwood will help it win more captive business from U.S.-based multinationals, particularly those with European subsidiaries.

"Since I'm here with good working knowledge of the Americas and Caribbean, we should probably trade on that," Mr. Darwood said.