A Bermudian insurance regulator yesterday told risk managers and other representatives of the Canadian corporate establishment that Bermuda welcomes their insurance business.

And he outlined an impending new tax agreement between Bermuda and Canada that will make it even easier than in the past for Canadian firms to form Bermuda captives.

Director, Insurance Licensing and Authorisation at the Bermuda Monetary Authority, Shelby Weldon, was addressing the 6th Annual Canadian Captives and Corporate Insurance Strategies Summit at the Metropolitan Hotel in Toronto.

Before an audience of about 80 delegates that included a number of risk managers and those seeking to organise captive formation, Mr. Weldon pointed out that the Island had signed some 21 Tax Information Exchange Agreements (TIEAs) and was currently negotiating with Spain and Belgium.

The Bermuda/Canadian accord will be signed on Monday in Bermuda.

The model agreement on exchange of information on tax matters was developed by the OECD (the Organisation for Economic Co-operation and Development) Global Forum Working Group on Effective Exchange of Information.

The purpose of the agreement is to promote international co-operation in tax matters through exchange of information. It grew out of the work undertaken by the OECD to address harmful tax practices. The lack of effective exchange of information is one of the key criteria the OECD uses in determining harmful tax practices.

The signing of this TIEA is deemed to confer a significant benefit to Bermuda in its endeavour to attract more Canadian captive business. The dividends of foreign affiliates that are resident in Bermuda that are paid to their Canadian parent companies out of the active business income earned in Bermuda will be exempt from relevant Canadian taxation.

There was much discussion of this significant development in the days leading up to, and during this week's Canadian captive meeting.

The two-day event, which continues today, attracted a surprising number of Bermuda representatives and exhibit booths included one from the Bermuda Insurance Development Council (IDC) and one from Business Bermuda.

There were more than a dozen Bermuda-based representatives registered, including lawyers, brokers, captive managers and insurance managers.

In a session entitled "Strategic Approaches for Creating a Captive with Sustainable Value" were Bermuda-based Nicholas Frost, senior vice-president of R&Q Quest Management Services Ltd. and his Canadian client Bruce Thorne who is president of the Corporate Protection Group.

Also on that panel of speakers are Mr. Weldon and head of corporate at Attride-Stirling & Woloniecki, Neil Horner.

There were also representatives of the financial services community from Barbados, Bahamas and Nevis.