Insurance firm cites ‘risks’ as it leaves Cayman

| 01/05/2010

(CNS): Global insurance and reinsurance company XL Capital Ltd is moving from the Cayman Islands to Ireland, according to a press release. The firm said that at a special meeting on Friday its ordinary shareholders approved changing the parent holding company’s place of incorporation. XL said the move would reduce certain risks and expected to complete the redomestication on or about 1 July 2010, assuming the transaction is approved by the Grand Court of the Cayman Islands and that other conditions to the redomestication are satisfied. The firm is one of a number of companies that have relocated to Dublin recently.

"We are grateful to our shareholders for supporting this initiative," said XL’s Chief Executive Officer, Mike McGavick.  "We believe that our redomestication to Ireland will offer us opportunities to reduce certain risks and reinforce our reputation across our global business platforms.  We look forward to the successful completion of this initiative this summer."
 XL shareholders also approved, among other proposals, the renaming of the Company from "XL Capital" to "XL Group".  The name change is expected to be made in July 2010.
Separately, the company announced that at its regularly scheduled annual general meeting its shareholders approved all proposals presented to them, including the election of three directors (Joseph Mauriello, Eugene M. McQuade and Clayton S. Rose) and the ratification of PricewaterhouseCoopers LLC as the company’s auditors for the year ending 31 December 2010.
The company also announced that its board of directors declared a quarterly dividend of $0.10 per ordinary share payable on the company’s ordinary shares. The dividend will be payable on 30 June 2010 to ordinary shareholders of record as of 15 June 2010.
In addition, a semi-annual dividend of $0.76275 per share on the company’s Series C cumulative preference ordinary shares was declared. The dividend will be paid on 15 July 2010 to all Series C cumulative preference ordinary shareholders of record as of 14 July 2010.
XL Capital Ltd, through its subsidiaries, is a global insurance and reinsurance company providing property, casualty, and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises on a worldwide basis. More information about XL Capital Ltd is available at www.xlcapital.com.

Category: Business

Comments (22)

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  1. Anonymous says:

    If the truth be told most of the companies that are moving to Ireland are shell companies and don’t really have a physical office or provide employment for local employees.  What is happening is just a a result of the world wide recession.  This too shall pass and is not the end of the world or Cayman as we know it, it’s global. 

    Please read the financial times and other investment periodicals then you will have a better understanding of what is really happening in the world of business and finance.  No the sky is not falling and the downturn in business is NOT the PPM or a UDP’s fault,  its global same happen all over the world. Blame it on Wall Street not Main Street.

     

  2. Anonymous says:

    It is amazing that these guys are leaving given the leadership of Mr. Weez Broke. Risks? What risks? 

  3. Anonymous says:

    Hey Mike,

    Any chance that you can articulate  the reasons for the move.

    Is it the high cost of living?

    The high cost of permits?

    Rollover possibly?

    Is it the inability of the government to govern responsibly 45,000 people with one of the highest percentages of civil servants in the world?

    I would appreciate your input.

     

  4. Anonymous says:

    How is Cayman trying to halt this mass exodus of companies.

    Is the Government revising such laws as staffing interfence and work permit restrictions that make it very unattractive to run a business here?

     

    • Anonymous says:

      How many times do I have to say that these moves from Cayman are not caused by rollover and work permit. This lie has been repeated so often that people are now blinded to the real reasons which have to do with the U.S. crackdown on tax havens and therefore a flight to countries with double taxation treaties with the U.S.  

      • Anonymous says:

        when will all the CEO’s and Chairman of these companies that are leaving cayman stop saying that the reason for leaving is primarily to do with employment problems, what do they know – Mr Anonymous 06:15 obviously knows better than them!! Why would they possibly know why they have chosen to leaveCayman??? why believe what these CEO’s say in private and occasionally in public when we can listen to this guy?

        Perhaps buddy you should stop telling people your lies? it is repeated so often by the very people who make the decisions to leave!!!

        • Anonymous says:

          "when will all the CEO’s and Chairman of these companies that are leaving cayman stop saying that the reason for leaving is primarily to do with employment problems"

          This is a perfect example of the lie. All of the CEOs and Chairmen of these companies are NOT saying that.

  5. Anonymous says:

    Well that’s their business. We got ours to do, or else the boat sinks.

  6. Writing on the wall says:

    Cayman is bad PR and the clever international companies are getting out fast.  This is the price for the greed in the 80’s and 90’s taking dirty money rather than anything to do with what is being done inCayman now.  But unfair as that may seem Cayman is in real real trouble now and the increased costs imposed by the government to prop up the civil service will speed up the flight.

    • Told Ya says:

      Why were we so keen to allow The Firm to be filmed here?  A very expensive piece of bad judgment a few years down the line.

    • Anonymous says:

      The CS will not speed up the demise of the Cayman Islands, the tax concessions and importation of cheap labour and Thrid World  practices and cultures will.

  7. tim ridley says:

    The unfortunate exodus of high qualitypublic companies to jurisdictions such as Ireland and Switzerland will continue and has everything to do with their network of full double tax treaties (not tax information agreements), with the USA in particular. Cayman has none and will never obtain any, unless it introduces direct taxation at rates that are sufficiently high to entice other countries to agree such treaties. 

    Given the current near unanimous view of the community here that any form of direct taxation is a huge mistake and must not be countenanced, we must accept the continued departure of these companies.  

    • Anonymous says:

      Re: Cayman has none and will never obtain any, unless it introduces direct taxation at rates that are sufficiently high to entice other countries to agree such treaties. 

      It would have been perhaps more accurate to indicate that it is unlikely that Cayman will get tax treaties when the government clearly doesn’t understand the difference between tax treaties and tax information agreements. It would also be realistic to say that in relation to every country to which Cayman has given away all of the bargaining chips in the form of an ill-conceived and rushed tax information agreement, a tax treaty which would encourage business to locate and stay here is not likely.

       I seem to recall reading a CNS article about a year ago in which the Premier designate and his advisors ridiculed the idea of tax treaties saying Cayman did not need them and that all Cayman needed to do was to sign away everything to their great friends at the OECD.  Consequently, my colleagues in the Isle of Man are not loosing business and the Isle of Man has been negotiating tax treaties with a number of countries all because they do understand the difference between a tax treaty and a tax information agreement and because they also understood all along that it was stupid to sign up to whatever the OECD told them do. Cayman business is shrinking – the Isle of Man’s is not. Isn’t ignorance grand.

      • Anonymous says:

        You are right about the Isle of Man but Tim is also right. The Isle of Man is not a no direct taxation jurisdiction. It has income tax starting at 10% for the bottom tier.  

    • slowpoke says:

      OMG, first I have to agree with Knal, that the GS issue will not significantly impact Cayman and NOW, I have to agree with you too!

      I have lost my bearings, more Haldol please.  

      (For those of you without the humour gene, I do actually agree with the previous posts.)

    • Anonymous says:

      Tim, as usual, you are absolutely correct.

  8. Scrooge McDuck says:

    Has anyone ever played Monopoly?  It may sound simplistic but much of what we read has a lot to do with how the game is played. 

    For instance, Ireland???  What is there about Ireland?  It’s wet, it’s cold, and it doesn’t have any palm trees or sandy beaches.  They must doing something different to drag these people away from Cayman.  Well laddies and lassies, not actually while this game of Monopoly takes place, here’s what they’ve been doing:

    "Throughout 2009, our leadership has resorted to the management strategy known as the ‘sandwich’ technique. This involves delivering the requisite bad news sandwiched between quasi-plausible platitudes. Thus, throughout 2009 the Government has sought to soften the news with some ‘positive thinking’ sloganeering and move from one blockbuster campaign to another. In the mean time, taxation burden explosion and general sense of uncertainty have weighted heavily on our economic psyche."

    Gee. That sounds vaguely familiar.  Governments often have to make some promises, or what are known as "concessions", to attract businesses.  What is often missing is… who pays for the concessions?  Not the ones making them more importantly, what concessions are asked of the businesses to set up office in a particular jurisdiction?

    You see in this game concessions made to businesses quite often revolve around lower taxes and/or anonymity and the subsequent answers given by businesses is that they will create jobs or "spin-offs".  This is being discussed in viewpoints right now.  It is those who will pay the taxes they weren’t required to in order to support the jurisdiction.  Voila!   Until, naturally the business is given a sweeter deal.  Then they move to……X, leaving someone holding the bag, or at least asking who the concessions benefit.

    It is a game closer to Monopoly than we’d like to think.

    And only time will tell if the people of Cayman, or the people of Ireland, are winners.

  9. Anonymous says:

    MAc was supposed to be the savior for business! Wow! What a stampede I see.