Bermuda Welcomes Insurer XL Group Plc From Ireland
by Mike Godfrey, Lowtax.net, Washington
08 March, 2016
The Bermuda Business Development Agency has welcomed the announcement by XL Group plc, a global insurance and reinsurance company, that it has proposed changing the parent holding company's place of incorporation to Bermuda from Ireland.
XL's Chief Executive Officer, Michael S McGavick, said: "Establishing our corporate home in Bermuda is a natural step for XL. XL has had a presence in Bermuda since 1986, which grew significantly following the transformative transaction with Bermuda-based Catlin last year. A significant portion of XL's business, in fact our largest operating subsidiary, has for decades been located in Bermuda and regulated by the Bermuda Monetary Authority (BMA)."
McGavick highlighted in particular that the BMA's regulatory regime, and its expertise as an international financial regulator, has recently been acknowledged and endorsed, with it being determined fully equivalent to Solvency II by the European Commission, the European Parliament, and the EU Council.
Welcoming the announcement, Ross Webber, the CEO of the Bermuda Business Development Agency (BDA), said: "XL Group's decision to move its place of incorporation to Bermuda is a strong endorsement of our jurisdiction's reputation and emphasizes the importance of having achieved full regulatory equivalence under Europe's Solvency II regime. Quality and experience set Bermuda far apart from other domiciles, and we're proud to have successful global companies such as XL Catlin recognize and leverage this value and choose Bermuda as their center of excellence. XL has a long history on our island, so it is fitting that synergy will continue and strengthen."
Brad Kading, President and Executive Director of the Association of Bermuda Insurers & Reinsurers (ABIR), added: "XL Catlin's plans to locate its top holding company in Bermuda is a signal that Bermuda's insurance regulation meets critical international and bi-lateral regulatory standards. The BMA's success in achieving EU Solvency II equivalence will pay real dividends for Bermuda in terms of international regulatory recognition, insurance jobs in Bermuda, and greater global understanding that Bermuda's insurance community provides meaningful economic contributions – both in Bermuda and in international markets where our expertise and capacity make consumer insurance markets more competitive."
"We have a lot of work yet to do, but we applaud the Bermuda Government's efforts to meet or exceed international standards, not only on financial market regulation, but also with the ever-evolving standards on tax-law transparency, cooperation, and enforcement. The insurance underwriting that takes place in Bermuda will be of increasing importance to demonstrate the economic substance that will become a necessary ingredient of meeting international tax-compliance standards. We underwrite here, we pool global risk here, and we make business decisions here. Bermuda insurance regulatory law describes the necessary requirements for having a head office here and being eligible for insurance group supervision. If you want to operate an insurer with a post-office box, you don't do it here."
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