Insurance and reinsurance giant XL Group is coming home, it was announced yesterday.

The company, which has had a major presence on the island for 30 years, aims to move its official home from Ireland to Bermuda.

Mike McGavick, the CEO of XL Group, said it was “a natural step for XL”.

The plan is subject to approval by shareholders and regulators. The change of domicile is not expected to mean jobs relocating to the island.

A spokeswoman for XL said: “We don’t foresee material changes to the current number of employees in Ireland or Bermuda as result of the redomestication.”

Mr McGavick explained that the takeover of Bermudian-based Catlin last year, and a decision by the European Union to give Bermuda companies a level playing field with European countries through Solvency II equivalence, had played a major part in the company’s decision.

“XL has had a presence in Bermuda since 1986, which grew significantly following the transformative transaction with Bermuda-based Catlin last year,” he said.

“A significant portion of XL’s business, in fact our largest operating subsidiary, has for decades been located in Bermuda and regulated by the Bermuda Monetary Authority, a premier regulator of global insurance and reinsurance companies.

“Further, the BMA’s regulatory regime and its expertise as an international financial regulator has recently been acknowledged and endorsed with it being determined fully equivalent to Solvency II by the European Union’s Commission, Parliament and Council.”

He added: “Following the Catlin transaction, and with the recent determination of full Solvency II equivalence for Bermuda, it has been concluded that the BMA is best situated to serve as XL’s group-wide supervisor and to approve XL’s internal capital model.

“This is a change that we believe will benefit XL’s clients, partners and shareholders alike.”

The company said it did not expect the change of domicile would have any material effect on its financial results or on its global effective tax rate.

Bradley Kading, president and executive officer of the Association of Bermuda Insurers and Reinsurers, welcomed the news.

“We have a lot of work yet to do, but we applaud the Bermuda Government’s efforts to meet or exceed international standards, not only on financial market regulation, but also with the ever-evolving standards on tax law transparency, co-operation and enforcement,” he said.

“The insurance underwriting that takes place in Bermuda will be of increasing importance to demonstrate the economic substance that will become a necessary ingredient of meeting international tax compliance standards.

“We underwrite here, we pool global risk here and we make business decisions here. Bermuda insurance regulatory law describes the necessary requirements for having a head office here and being eligible for insurance group supervision.

“If you want to operate an insurer with a post office box, you don’t want to do it here.”

Ross Webber, CEO of the Bermuda Business Development Agency, said the news was “a strong endorsement of our jurisdiction’s reputation”.

The company’s plan calls for a new Bermuda exempt company, XL Group Ltd, which would replace XL Group plc as the ultimate holding company for XL group of firms.

Shareholders would get a one-for-one share deal for every share they hold.

The proposal is expected to be put to shareholders within the next few months and, if approved, completed in the third quarter of this year.

In a statement XL said: “The proposed redomestication will be subject to receipt of necessary regulatory approvals, approval by the company’s ordinary shareholders, satisfaction of other conditions and sanctioning by the High Court of Ireland.”

The company added that it would continue to be registered with the US Securities and Exchange Commission and subject to its rules.

XL Group would also remain under the applicable corporate governance rules of the New York Stock Exchange and continue to report its financial results in US dollars under US accounting principles.

The proposed move is also not expected to affect the company’s position in the Standard & Poor’s 500 list of top companies.

XL was initially domiciled in the Cayman Islands, although it maintained its main operations in Bermuda. It moved its domicile to Ireland in 2010.

XL Group has a market capitalisation of $10.2 billion. Its shares yesterday edged 26 cents lower, or 0.75 per cent, on the Nasdaq to close at $34.38.