Flagstone Re remains fully committed to staying in Bermuda, despite questions being raised about the reinsurer's future after it set up its operations base in Switzerland in August this year.

Mark Byrne, chairman of Flagstone Re, called on that Government to make international business feel welcome and added that revising its six-year term limits would go some way to tackling the issue.

This comes in the wake of three Bermuda-based companies — Tyco International, Foster Wheeler and Weatherford — announcing plans last week to move their operations to Switzerland.

Mr. Byrne dismissed suggestions that the Hamilton-based company would move its headquarters to Martigny following the announcement that its holding company Flagstone Reinsurance Holdings Ltd. had restructured its global reinsurance operations by merging its two wholly-owned subsidiaries, Flagstone Reinsurance Ltd. of Bermuda and Flagstone Reassurance Suisse SA into one operating platform.

The merged entity, Flagstone Reassurance Suisse SA, with its existing Bermuda branch, provides clients and the market as a whole a solid, single capital base to support Flagstone's reinsurance business, while the new structure offers clients a choice of either Bermuda or Swiss underwriting access and the advantage of full participation in both the important Bermuda market and the global markets served in Switzerland.

In an exclusive interview with The Royal Gazette, Mr. Byrne urged Government to rethink its policy on term limits to enable companies to keep their best staff, to create fast-track swipe cards for repeat business visitors to the Island and continue to provide the Bermuda Monetary Authority (BMA) with the tools and support to do its job properly in the future.

He also said Flagstone had no exposure to investments managed by Bernard Madoff and that he saw the warning signs before the New York hedge fund manager was arrested on fraud charges relating to an alleged $50 billion scandal in the US.

"I have just seen a lot of reference to the issue of whether the company is staying or going," said Mr. Byrne. "But I can reassure you that Flagstone is extremely committed to Bermuda."

Mr. Byrne said that while Flagstone had its capital tied up in Switzerland, the reinsurer's intellectual property was located in Bermuda.

He said the Island benefited from the company and international business as a whole being based there by receiving Government fees, payroll taxes, jobs and training for Bermudians, with well-trained and paid guest workers contributing to the local economy in terms of bringing business to Bermuda's shores, teaching Bermudians key skills and spending money on rent and in restaurants, as well as the sector driving three-quarters of the Island's charities.

"But moving our operating business to Switzerland does not change that," he said. "Bermuda derives the real benefit of us being here."

Mr. Byrne cited his own 15 years spent in Bermuda and CEO David Brown's 28-year stay on the Island as proof that Flagstone has no plans to go anywhere, a rarity for top management to show such commitment to Bermuda's re/insurance industry.

But he called on Government to continue to sustain a successful environment for doing business and retain and attract companies instead of seeing them go to places such as London and Zurich.

To do so, Mr. Byrne asked for swipe cards to be issued to frequent business visitors to allow them quick and easy access through customs so they don't get stuck in a queue full of tourists.

In addition, he suggested Government reconsider term limits, with Flagstone seeking to recruit and keep the best international talent, rather than having to move their skills, expertise and jobs to another office overseas.

He pointed out that the reinsurer had a policy of employing as many qualified Bermudians as possible, which currently makes up two-thirds of its workforce along with spouses of Bermudians, but that some of the essential personnel had to come from outside the country.

"I think term limits make it very difficult for companies to plan to have their employees make a career here," he said. "I do not see that term limits serve a cause in our industry very well because they just make it harder to run a business. There will be no one to mentor and educate talented, rising Bermudians.

"I do not know who gets protected by this six-year rule, but I do know who gets harmed by it. Government needs to tell international companies that they are wanted here."

Mr. Byrne reckons it would be a mistake for Government to stop companies trying to leave Bermuda and should let them sustain themselves in their own way.

He added that recognition needed to be made of the BMA and its reputation as a top offshore financial regulator, but that the Island must continue to invest in the Authority to equip it with the necessary time, manpower and money to carry out its function to the best of its ability in years to come.

Mr. Byrne, who was previously the chairman of West End Capital Management Ltd. in the hedge fund industry, confirmed Flagstone had no money invested with Madoff and that the "red flags were up" long before the hedge manager's arrest.

"A lot of obvious red flags were up on how he conducted his business and it was amazing that he could fool so many people for so long," he said.

Flagstone has 40 employees on the Island, as well as 18 working for its own airline Longtail Aviation, and 60 in Switzerland, as part of a 300-strong workforce worldwide, including back office operations in Halifax and Hyderabad in India.