Ireland beats Cayman for XL
(CNS): Citing the need to reduce “certain risks” insurance and re-insurance firm XL Capital Ltd has announced its intention to change the parent holding company’s place of incorporation to Ireland from the Cayman Islands, with the parent holding company to be renamed "XL Group plc". XL’s Chief Executive Officer, Michael S. McGavick, said in a press release that the change was in the best interest of shareholders and that Ireland had strong international relations with OECD countries.
“Among other benefits, we believe the proposed move will reduce certain risks that may impact us and offer us the opportunity to reinforce our reputation, which is one of our key assets, and to better support our global business platforms. The new "XL Group" name is desirable to reflect our exclusive focus on providing property, casualty and specialty insurance and reinsurance products for our customers’ complex risks," he stated in a press release.
To effect the redomestication, a new Irish public limited company, XL Group plc, would replace XL Capital Ltd as the ultimate holding company of the XL group of companies, and the Company’s ordinary shareholders would receive one ordinary share of the new Irish company in lieu of each ordinary share of the Company held by them.
XL expects to submit the proposal for redomestication, along with related proposals, to its shareholders in the next several months and complete the transaction on July 1, 2010. The proposed redomestication will be subject to approval by the Company’s ordinary shareholders and the Grand Court of the Cayman Islands, as well as satisfaction of other conditions.
The firm stated that it has operated in Ireland for most of its corporate history and is very familiar with its regulatory and legal environment. It described Ireland as having strong international relationships as a member of the Organisation for Economic Co-Operation and Development (OECD) and the European Union, a long history of international investment, and long-established commercial relationships, trade agreements and tax treaties with the other European Union member states, the United States and other countries around the world.
“As a result, XL believes Ireland offers a stable long-term legal and regulatory environment with the financial sophistication to meet the needs of XL’s global business,” the release stated. “XL does not expect the redomestication will have any material impact on its financial results. XL will continue to be registered with the U.S. Securities and Exchange Commission ("SEC") and be subject to SEC reporting requirements.”
Category: Business
Cayman is losing the business it had, both in terms of clients and on island firms. Only a naive individual who would beleive that fund managers would see any sense in moving their physical businesses to Cayman, especially from London, New York or San Francisco. We need to cut the cost of doing business here, both in terms of fees and the signficant indirect costs incurred by employment and immigration laws. If we don’t then the youth of Cayman will have two main carerr options: bartending or drug smuggling.
For all Caymanians who taunted the professional expats to "go home" and "don’t let the door hit you in the ass at the airport", your chickens are now home to roost. Enjoy!
We can expect to see more of this from the larger corporations. The Premier needs to concentrate on client retention rather than swanning around the world selling Cayman’s financial services that he does not understand in the the first place.