BMA boss Cox sees strong interest in captive formations
Bermuda's top financial regulator said he has been delighted to see so many people interested in doing business on the Island at North America's largest insurance conference of the year.
Speaking from the Risk & Insurance Management Society's (RIMS) Annual Conference in Denver, Colorado, Bermuda Monetary Authority CEO Jeremy Cox said he'd been impressed by the volume of visitors to the Bermuda booth in the Colorado Convention Center.
“These people are not just coming by for the Bermuda bag,” Mr Cox said, referring to what is traditionally one of the most popular ‘freebies' at the annual conference. “They're coming to chat about doing business.
“Of all the jurisdictions represented here, Bermuda's booth was the one getting the most activity. It was very positive to see people talking with the Authority's insurance licensing and authorisations director Shelby Weldon and interested in forming new companies in Bermuda.”
Mr Weldon, a veteran RIMS visitor, said the conference attendees numbered around 9,700 — up seven percent on last year's event. Much of the interest from those visiting the Bermuda booth had revolved around captive insurers, companies that risk managers set up to provide what is effectively self-insurance to their parent corporations.
The captive sector forms the bedrock of the Bermuda insurance market and the Island remains the world's leading offshore jurisdiction for captives.
Statistics revealed by the BMA last week show that Bermuda captives wrote $46.1 billion in gross premiums in 2012 — 38 percent of the Island's total insurance market — and reported total assets of $145.6 billion.
“There were a lot a lot of questions about the steps to go through to establish a captive, the rules of incorporation, and also regulatory regime developments,” Mr Weldon said.
Bermuda, the pioneering captive sector domicile, these days faces increasing competition from several US states that have created regulatory frameworks designed to attract captives. The onshore versus offshore debate gained momentum after the financial crisis. And increasing scrutiny has emerged in the past year with the New York insurance regulator looking at how companies like Genworth and MetLife use their offshore captives.
At RIMS, insurance buyers were more concerned with the practicalities of setting up captives and the potential benefits for their companies.
“There were no questions about onshore versus offshore or tax-related matters,” Mr Cox said.
He added that the relationship between Bermuda and those promoting US captive jurisdictions like Vermont and Hawaii, who were also touting for business in the Mile High City, was not as adversarial as some might imagine.
“I think they see us as comrades who understand the benefits and we all use this kind of forum as an opportunity to continue the dialogue.”
The Bermuda contingent in Denver numbers around 200, headed by Premier Craig Cannonier, Economic Development Minister Grant Gibbons and Finance Minister Bob Richards, and representatives from numerous Island companies.
“I can't come to RIMS every year and this year there are a lot of new faces from Bermuda,” Mr Cox said. “They are in the Bermuda booth and they are speaking to people about all aspects of the jurisdiction. We are all speaking with one voice. There's a lot of camaraderie and good feeling.”