CAPTIVES IN BERMUDA www.captiveinternational.com
953(d) and beyond
US tax reform, natural catastrophes
and new technologies are all
shifting insurance market
conditions, which is having an
impact on captives in Bermuda,
explains Gary Harris of Appleby.
t is well known that
Bermuda was the
birthplace of captive
insurance in the 1960s
and has continued to be a
financial market of global excellence
to corporations. Bermuda remains
the largest captives domicile with 739
captive insurer licences at the end of
2017 and continues to see a robust
number of applications each year.
However, Bermuda is, like many
other jurisdictions, also observing an
increase in surrendered licences. At
the end of 2017 about 7 percent of all
captive licences had been surrendered.
There are several reasons for
captives to surrender licences:
(i) Business combinations: parent
companies of captives merge or
amalgamate which results in the
voluntary liquidation of any captives that
are considered surplus to requirements.
(ii) Redomiciliations: the US Base
Erosion Anti-Abuse Tax (BEAT), OECD
base erosion and profit shifting and
similar provisions have resulted in a
few captives redomiciling onshore.
(iii) Attractive premium rates: some
companies decide to return to the
traditional insurance market after
making a determination that the
traditional insurance prices for their
particular risks are competitive.
(iv) Conversions: existing captives
seek to increase their book of unrelated
business and decide to surrender
their captive licences in favour of