Cayman loses insurance firm to Bermuda

| 02/09/2010

(Royal Gazette): Gerova Financial Group Ltd a speciality international reinsurance firm  is to shift its domicile to Bermuda from the Cayman Islands, after shareholders approved the move at an extraordinary general meeting. The group had already established a life reinsurance unit in Hamilton, Gerova Re, which has now received its licence from regulator the Bermuda Monetary Authority. "We are excited for our group parent to become a Bermuda company," said Lou Hensley, chief executive officer of Gerova Re. "We believe that Bermuda is one of the world’s leading reinsurance centres, and is an attractive location in which to be based.

 
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  1. Anonymous says:

    For the people we are talking about Grand Cayman (and that is all that matters for these purposes) is a fairly ugly piece of scrub with nasty architecture and no culture.

    Though am an expat, I feel so offended by this comment!

    • Anon says:

      Don’t feel badly, Anonymous.  The author of that post is obviously not a world traveler.  His/her world is very small- been out to Bermuda, down to the Caribbean and over to the east coast and thinks people all over the world are pretty much the same.

      • Ham Hilton says:

        Anon,

        You probably could not be further from the truth.  I probably have about 70 countries’ stamps in my passport, have lived on three continents and been to many many Caribbean islands.  My view that Cayman is ugly and has nothing of interest by way of culture comes from a great deal of comparators.

        Thank you for you assumptions.  They were entertaining and probably sheer projection as a way of coping with your own denial.

        I do think Cayman has done very well with the very little it had going for it, but it is shame that terrible development and environmental controls meant that it so much of it now is aesthetically distasteful.

         

        • Anon says:

          Dude, the pages of my passport are almost full- haven’t been to the Galapagos yet.  You’re complaining that Bora Bora isn’t on the same level as San Francisco.  I find you boring, boring. 

  2. Anonymous says:

    Work permit fees are cheaper in Bermuda.

    • Anonymous says:

      Misleading. When you couple that with payroll taxes it is much more expensive. There is a top rate of 16% of up to $750,000 of salary. Practically everything is more expensive in Bermuda.

      I guess they couldn’t blame it on rollover this time since Bermuda has its own (shorter) rollover.

      • Anonymous says:

        And executives will generally not be allowed to buy their own homes, and will likely be scowled at in public because of their skin color, and will never be allowed to become a citizen, and may not be allowed their own cars, and will have to deal with cold wet winters, and will have no open spaces to run with a pet or a child, and will be asked to account not only for the nationality of their secretary but also her race.

         

        Great move.

        • Anonymous says:

          Obviously this writter has not even an inkling of how the worl goes about.

  3. Slinga says:

    I think the issues is really that Bermuda has achieved the critical mass of insurance work to be the default jurisdiction of choice for it, especially given the ability of Bermuda to have so many of the professionals involved in the business living on island.  Cayman can’t really compete, does not encourage high end staff to move here and to be honest can’t offer anything like the lifestyle Bermuda does if you are a top end executive.

    • Anonymous says:

      I think they would have known all of those things before establishing here in the first place.

      What is it that is so fabulous about the Bermuda lifstyle?

      • Ham Hilton says:

        Bermuda is far more sophisticated than Cayman.  But that is not would be difficult.  It is far more beautiful than Cayman.  But again that is not too much of a challenge.  It is also far quicker and easier to get to civilization.  For the people we are talking about Grand Cayman (and that is all that matters for these purposes) is a fairly ugly piece of scrub with nasty architecture and no culture.

        • Pauly Cicero says:

          Give it a rest.

          • Ham Hilton says:

            The truth is to hard to read is it?

            • Pauly Cicero says:

              Oh it’s a very easy read considering the level it is coming from. I’m just tired of reading it. By the way, you forgot to mention the spitting.

        • Anonymous says:

          I assume that you are living in Bermuda then.

          Funny, none of my colleagues who have lived in Bermuda think (apart from the natural beauty and golfing) that it is all that fabulous.   

        • Anon says:

          Go book your February trip in Bermuda or maybe Hilton Head.  Write CNS afterwards about all of the wonderfulness you’ve just experienced.  I take it that you live your life on a golf course and the 19th hole.

          • Ham Hilton says:

            Thanks for making assumptions about me.  They are wrong.  I don’t play golf but I have heard the golfing in Cayman is pretty inadequate.

  4. Anonymous says:

    Must be running from that payroll tax that Cayman don’t have to the one that Bermuda does have:).

    • Pauly Cicero says:

      It may just be a simple redomicile. If they are not actually operating from Bermuda then payroll tax, work permit fees, cost of living, etc. may not be in play.

  5. Anonymous says:

    Funny, I did read anything in the article that showed why it chose Bermuda over Cayman. Everything said about Bermuda could also be said about Cayman.  

    • Anonymous says:

      "Everything said about Bermuda could also be said about Cayman"

      Really?  Are the government and other fees in connection with running a business as high in Bermuda as they are in Cayman? 

      No I am not criticising I am genuinely asking – seeing as you seem to be in the know.

      But for your information – these were the recommendations given to the Board of Directors before they came to their decision:

      We are subject to reputational, political, tax and other risks because of negative publicity regarding companies that are incorporated in jurisdictions, including the Cayman Islands, whose economies have low rates of, or no, direct taxation or which do not have a substantial network of double taxation (or similar) treaties with the United States, the European Union or other members of the Organization for Economic Co-operation and Development (the “ OECD ”). Our board of directors believes that changing our place of incorporation will reduce those risks and offer the opportunity to reinforce our reputation, which is one of our key assets, and to better support our legal and business platforms.

      Additionally, there have been, and could be in the future, legislative or regulatory proposals that could increase taxes for companies incorporated in jurisdictions such as the Cayman Islands. Although we do not believe that any proposals under current legislative or regulatory consideration would directly impact us if enacted, our board of directors believes that the incorporation of the Company in the Cayman Islands increases the risk that legislative or regulatory proposals that might be enacted in the future could materially and adversely affect us.

      After considering a number of locations, our board of directors ultimately selected Bermuda as the best available alternative based on many factors, including:

        Bermuda has strong international relationships as a territory of an OECD member nation, a long history of international investment, particular in the areas of insurance, reinsurance and investment funds, and long-established commercial relationships, trade agreements and tax treaties with the United States and other countries around the world. As a result, we believe Bermuda offers a stable long-term legal and regulatory environment with the financial sophistication to meet the needs of our global business.
        A large number of leading international insurance companies are based in Bermuda making the territory one of the world’s largest reinsurance centers. Those internationally owned and operated businesses that are physically based in Bermuda — of which there are around four hundred — are represented by the Association of Bermuda International Companies. In total, over 14,000 exempted companies (i.e. international companies) are currently registered with the Registrar of Companies in Bermuda.
        Bermuda, like the Cayman Islands, is a common law jurisdiction, which we consider to be less prescriptive than many civil law jurisdictions. As a result, we believe Bermuda’s legal system to be more flexible (including with respect to the management of our capital structure), predictable and familiar to us than a civil law system.
        Bermuda law, like Cayman Islands law, permits dividends to be paid in U.S. dollars and upon the approval of the board of directors without the need for shareholder approval, thereby avoiding currency risk relating to our dividends.
        Our headquarters are based in Bermuda.

       Source: http://sec.edgar-online.com/gerova-financial-group-ltd/6-k-report-of-foreign-issuer/2010/08/16/section3.aspx

      • Anonymous says:

        I don’t think you disproved my point. Like Cayman Bermuda was also on the OECD’s grey list before being moved to the white list. Like Bermuda, Cayman is a territory of an OECD member. Like Cayman, Bermuda does not have a network of double taxation treaties (as opposed to tax information exchange agreements which they both have) with a wide range of OECD members etc. etc.

        The cost of living and doing business in Bermuda is significantly higher in Bermuda than in Cayman which has everything from payroll taxes to property taxes, PLUS import duties and stamp duties.

        It is true that Cayman does get more negative publicity though. The move seems to be based on fears that Cayman is the primary target for future adverse international legislative initiatives. Although Bermuda is a leader in the re-insurance industry Cayman has been catching up fast.    

  6. Anonymous says:

    Whoop de do!