Criticisms of Bermuda claiming it is not a “real jurisdiction” are outdated and need to be stopped, according to panellists at the 2018 Bermuda Executive Forum.
Bermuda achieved Solvency II equivalence in March 2016, meaning the EU considers the jurisdiction’s insurance regulation standards to be equivalent to its own. Panellists suggested this was proof of its quality as an insurance jurisdiction.
Ronnie Klein, senior advisor at Bermuda International Long-Term Insurers and Reinsurers, explained: “People do think of it as it was 15 years ago and we really do need to get the message out that this is one of two jurisdictions in the world that is Solvency II equivalent.”
“It is very important to be in a regulated environment. I know startup companies that go out of their way to go to a Bermuda or a Switzerland (the other Solvency II equivalent jurisdiction) to be regulated because that helps with raising capital and getting ratings.”
He added: “The world has changed and I think we just need to get the message out that this is a real jurisdiction.”
“Someone has got to stand up and tell the people who are thinking of Bermuda as it was 15 years ago, ‘wake up a little bit’.”
Mark Allitt, managing director, advisory, KPMG Bermuda, said refuting this outdated criticism was an “important message”.
He commented: “People are always assuming Bermuda is there as a haven for risk when quite frankly it isn’t and it never has been.”
“For the 10 years I have been in Bermuda there has always been the criticism that it is an opportunity or dumping ground for business because it is not regulated to the same standards—I think that is absolutely not the case.”
He explained: “The way I viewed Solvency II equivalence was an affirmation of our regulatory approach, to pacify criticism from the EU.”
Providing a London-based perspective, Jane Warren, executive member of the Association of Bermuda Insurers and Reinsurers, stated: “Bermuda is highly regarded in London. Imitation is the sincerest form of flattery and in lots of ways Bermuda is an incubator for London in terms of ideas.”
Speaking on a captive insurance-focused session, Mike Parrish, head of business development for Marsh Management Services Bermuda, said the argument that Bermuda is a tax haven is “defunct” as most captives take the 953(d) tax election, meaning their companies are subject to US tax.
He added: “Bermuda is there as a blue ribbon prime domicile for companies who are serious about forming a captive and using it as part of their risk management programme.”
