Lancashire moves tax domicile to Bermuda
Lancashire Holdings Ltd has re-established its group supervisory and tax domicile in Bermuda after a seven-year sojourn in the United Kingdom.
The specialty insurance and reinsurance group, originally domiciled in Bermuda, switched its tax base to the UK in 2012, establishing its head office and conducting the majority of its board business in the UK.
The re-domiciliation to Bermuda was announced in the company’s 2018 annual report, which was released yesterday.
Peter Clarke, the company’s non-executive chairman, said the Lancashire board held detailed discussions during 2018 about the most suitable group insurance supervisory and tax domicile for the company. The company, Mr Clarke wrote, initiated engagement with the Prudential Regulation Authority in the UK — the group’s supervisory regulator between 2016 and 2018 during which time the group was subject to the requirements of the UK’s Solvency II regime — the Bermuda Monetary Authority and HM Revenue and Customs in the UK, further to which it was agreed the company should make the switch.
“On balance,” Mr Clarke wrote, “the board felt that the transition of group supervision to Bermuda and the BMA would assist in ensuring a continuing strategic focus on the growth and development opportunities in the US specialty and catastrophe markets.”
Mr Clarke said the move will not affect the regulation of the group’s UK insurance entities, which will continue to be regulated by the PRA and the Financial Conduct Authority — and in the case of CUL and Syndicates 2010 and 3010, Lloyd’s.
Lancashire announced in August 2011 that it would be switching its tax base from Bermuda to the UK. At the time, Neil McConachie, Lancashire Group Holdings’ president, said that the move would make senior management decision-making faster and easier while reducing risks.