TUESDAY, JUNE 5: Good afternoon, everyone. Thank you for the kind introduction.
I have just recently returned from visiting Asia where I learned a bit of Manderin, so to my Asian friends I greet you with “Knee How”. To my Latin American friends I say Buenos Tardes to my friend from Quebec I say Bonjour, to my English speaking friends I say Good afternoon, and to my Bermudian friends I say What’s up.
On behalf of the Government of Bermuda, it gives me great pleasure to welcome you and to extend congratulations to the Bermuda Captive Conference Committee for hosting the 2012 Bermuda Captive Conference.
As the Minister responsible for Business Development and Tourism I am certainly cognizant that this year’s Bermuda Captive Conference has grown considerably with over 341% more room nights being booked for this year’s conference than registered in 2011. Total registration as at 11:36am was 587 compared to 558 last year. We would like thank you all for making this a success. Give yourselves a hand.
Growth in business travel, according to the World Tourism and Travel Council Report on Business Travel, from 2000 to 2007 facilitated the creation of over 40 million jobs through related increases in trade and productivity. This represented almost 20% of the growth in global employment over the same period. I wish to thank our business travelers for making Bermuda your destination of choice and we hope to have the privilege of receiving you back on our shores in the near future whether it is for business or pleasure.
These types of events help to create a collegial environment and promotes dialogue and discussion that effect not only our work place but the Bermuda market place and beyond.
Bermuda’s foundation is strong as an offshore financial jurisdiction. Our Regulatory track record dates back to the 1930’s. The Bermuda Monetary Authority is second to none. Our Service providers’ legal and accounting are world renown and the country is politically and economically stable.
Bermuda has among the highest sovereign debt ratings from Fitch, Moody’s, AM BEST and S&P. Bermuda is also committed to prudent long-term financial planning and has one of the world’s lowest net debt to GDP ratios.
Bermuda is the right domicile which will allow for optimal operational efficiencies, growth potential and success. Bermuda has fundamental principles which have stood the test of times on which its very foundation is built on, integrity, trust, transparency and fairness.
Let’s look at one of our sectors, which you are familiar with.
The insurance and reinsurance industry and its development has been a hallmark of Bermuda’s ability to respond to challenges, capacity issues and opportunities by providing an appropriate and efficient response to the market which in turn allows the
timely marriage of capital markets to meet insurance and reinsurance needs on a global basis.
We have seen Bermuda’s development as a market go from a predominantly captive market in the 1980’s to the fully fledged commercial market it is today.
On February 21, 2012, the Bermuda Monetary Authority (BMA) issued a press statement remarking that the “Bermuda insurance market remained resilient in 2011 and continued to absorb the impact of market issues, including a continued softening of prices, low interest rates and above-average losses from natural catastrophes.”
Further, the BMA’s incorporation data indicated a 50% increase in the number of new Bermuda insurers for 2011 being 54 up from 36 in 2010. Included in this number is the tremendous interest in special purpose insurers or SPIs with 23 SPIs being licensed in 2011 compared to 8 in the previous year.
Additionally, the authority has licensed eight Class 4 insurers in the last five years, representing over $8 billion of new capital. The latest venture, established by Validus Holdings, Ltd. represents a continuous influx of significant capital into Bermuda that has been achieved in challenging global market conditions. All of this bodes well for the Bermuda market but just as importantly Bermuda and its people.
Much has been said and written about the success of the Bermuda market but what is becoming clear is Bermuda’s outstanding reputation not only in the international
regulatory risk management arena as it was selected as one of only three countries by EU to be assessed in the first wave for equivalence with Solvency II, but in its leadership and track record signing onto 33 Tax Information Exchange Agreements (TIEAs). Just last month out Premier signed two more (TIEAs) one with Malaysia and the other with Italy. Just over a week ago The Government of Bermuda signed a Memorandum of Understanding with Qatar covering economic, commercial and technical cooperation. In addition we signed a Double Taxation Agreement with Qatar which allows investors in countries that do not have a DTA with Qatar to establish a domicile in Bermuda and benefit from the Qatar Bermuda DTA and the DTA network. The DTA also provides incentive to Qatar entities including Qatar Airways, also Bermuda’s reinsurance industry and shipping companies around the world that have Qatar or GCC ownership interest.
These agreements demonstrate Bermuda’s strong and definitive commitment to transparency and international cooperation.
We are advancing strategies in the area of fund management specifically targeting markets best suited for Bermuda, modernizing its corporate incorporation and administrative regimes, improving its legislative platform, and raising the profile of the aircraft registry to better align the public and private sectors, together with the independent regulatory to improve Bermuda’s growth and sustainability strategy.
Bermuda has a hard earned and well-deserved reputation recognized globally, as a premier international financial centre and centre of excellence. We continue to improve upon our global leadership with dependable infrastructure, and unparalleled regulatory regime and innovation supported by the very best in human capital.
The credibility of our jurisdiction is reflected in the strength of the mature international relationships we share with organizations that are charting the future course for the insurance, asset management and other financial services industries.
The Government of Bermuda recognises that policy issues are most effectively addressed with the involvement of relevant stakeholders on an equal footing. In that regard, it is noted that each component of the insurance sector, through the auspices of the Insurance Advisory Committee, is authorised in law to provide advice to the Government on any matter relating to the development and promotion of the insurance industry in Bermuda. This partnership has resulted in an unhindered flow of data and information between the Government and the insurance sector which is essential for business, trade, investors and the people of Bermuda. From its inception, the members of the insurance sector have risen to the occasion by providing the Government with invaluable advice.
The development and unprecedented success of the Bermuda captive insurance market, is maintained by a respect for recognized international standards that are established through transparent, market-driven, and consensus based mechanisms. As a result, Bermuda is now home to the significant intellectual capital required to successfully operate a first class international insurance center.
The collective global challenges in 2012 are daunting. As we look to the future, we, the Government of Bermuda, know that the appropriate balance of government policies, relevant regulation frameworks and an innovative and fully engaged private sector can continue to produce positive results for Bermuda and the global economy.
From this platform almost 100 captives have been domiciled in Bermuda for over 40 years, and another 300 for over 30 years. Today Bermuda boasts over 862 captives, an increase from 845 reported in 2010, while we continue to incorporate and register new captives in 2012, with companies from over 40 countries choosing to domicile their captives here.
We cannot overemphasis the importance of our insurance sector as many major corporations base their captives in Bermuda and also purchase insurance and reinsurance from within the Bermuda market. Therefore, supporting this vibrant captive market is the fact that Bermuda is one of the most sophisticated insurance markets on the planet and is home to 16 of the world's 35 largest reinsurers. This space host epic levels of total assets which exceed $500 billion, gross premiums of nearly $108 billion, with capital and surplus of more than 185 billion. Bermuda insurers and reinsurers paid 51% of reported liabilities resulting from the 2012 New Zealand earthquake, 35% of Chile’s 2010 earthquake and 29% of the international reinsurance share of the Japanese 2011 earthquake. Bermuda based insurers contributed 22 billion to rebuild the hurricane damaged US Gulf and Florida coast in 2004 and 2005 and support 25% of the US medical liability insurance and reinsurance market.
This platform was not created by accident, but is the product of thoughtful leadership in regulation, contract certainty and best practice, together with innovation in policy
creation and application, through products like cell companies, SPIs, captive pooling and sidecars.
The Government of Bermuda is very proud of current service levels and the value for money provided to clients. Bermuda cannot be compared to captive jurisdictions around the world because we are not just a captive jurisdiction, we are so much more. We are a major insurance market providing coverage to the world. As such, the level of service is first class. It must be to play in this league.
By the end of the Conference, I hope and expect that we all will have better insight into how Bermuda has become and continues to be a safe harbor for your risk needs.
Bermuda-based companies may adopt a secondary name in non-Roman script (such as Arabic and Chinese), and the objects for which companies may be formed are largely unrestricted
There is flexibility regarding the formation of private acts
Company registration and incorporation takes place quickly, with incorporation occurring within one day, and approval by the BMA taking 1-2 days, increasing overall cost-effectiveness for business.
There is a general perception that the cost of doing business in Bermuda is high. However, Bermuda is actually more cost-effective than many other financial centers
The BMA can facilitate insurance licensing in 3 business days and issue a Certificate of Compliance within 2 business days
There are no legal restrictions on the asset type, asset concentration, strategy or overseas jurisdiction in which a fund may invest, which means greater flexibility in approach
A Bermuda Partnership can elect to have a separate legal personality, should this be required
Unlike some jurisdictions, no local auditor sign-off is required for Bermuda mutual funds
No exchange control for non-resident undertakings and no restriction on the repatriation of funds
Umbrella or multi-class funds can be created as Segregated Accounts Companies
Processing and approval of applications for new funds or material changes can be completed within 6 business days by the BMA
Sole directors and corporate directors of Bermuda companies are permitted
There is no requirement for meetings of directors or members to take place in Bermuda
Option to waive Annual General Meeting
The Team in the Ministry is working tirelessly to bring other changes such as the Foreign Direct Investment Legislation and Corporate Service Providers legislation which we anticipate laying before Parliament soon.
In my capacity as Minister of Business Development and Tourism, I am charged with ensuring that my Ministry is designed to provide an innovative space within Government which will be focused on stimulating the creation of jobs, the growth of GDP, improved brand equity, and further diversification of the economy and industry sustainability.
To this end my vision is not limited by what Bermuda is now, but by what it can become.
Again, I especially want to thank the Bermuda Captive Conference Committee for hosting this event and all of our guest experts who will be participating on panels.