In a spirited address to Bermuda's House of Assembly, Bermuda's Premier and Minister of Finance Paula Cox sought to allay fears that the Cayman Islands, in its proposals to diversify its economy to attract insurance companies, could present a challenge to Bermuda's position as the world-leading domicile for (re)insurance entities.
Cox reiterated that the provision of a number of concessions, such as work
permit exemptions, will not dethrone Bermuda as the (re)insurance domicile of
choice. She said: “Provided that [Bermuda] remains focused on its strategies
of collaboration with its business partners to enhance its enviable reputation
by strengthening the territory's relationships with the European Union, UK and
US jurisdictions, strengthening Bermuda's regulations to satisfy the global
regulatory agencies, and enacting business-friendly legislation, it is unlikely
that this initiative will represent a serious threat to Bermuda’s existing
reinsurance market in the short term.”
“[The] Bermuda marketplace is known globally as a centre of excellence
in the area of reinsurance underwriting," Cox added. "Advances in
the technical pricing of risk, the creation of alternative forms of capital
such as sidecars, regulatory innovation, and a series of other developments
including strong sovereign ratings, have combined to make Bermuda one of the
top three reinsurance centres of the world. We are known as the risk capital
of the world.”
“Additionally, the credibility of our jurisdiction is reflected in the
strength of its international relationships with those organizations that are
shaping the future course of the reinsurance industry," Cox continued.
"I refer specifically to: the International Association of Insurance Supervisors,
the European Insurance and Occupational Pensions Authority, and the National
Association of Insurance Commissioners. Thanks to connections with these entities
that have been established by the Bermuda Monetary Authority over many years,
Bermuda plays a leadership role in assisting with the development of the world’s
risk industry.”
Unlike Bermuda the Cayman Islands will not seek equivalence with the Solvency
II Directive, meaning that the territory will in theory attract insurers looking
to circumvent the stringent capital buffer requirements being introduced by
other territories.
The Bermuda government's decision has been backed by the industry with Brad
Kading, President of the Association of Bermuda Insurers and Reinsurers stating
the following in an online blog post:
“Don't count Bermuda out. New 10-year work permits and incentives for
locating 'job creators' in Bermuda have the government's support. Bermuda's
internationally active insurance groups need to be regulated by reputable, strong,
robust solvency regulation and the BMA has met the test with its Solvency II
equivalence program. [Entities] can't operate a successful internationally active
insurance group without meeting the existing and future international regulatory
standards. Kudos to the BMA for its pursuit of that goal.”
LAWANDTAX-NEWS.COM
