XL Catlin intends to change its location from Dublin to Bermuda, according to Business Insurance. The company said the move reflects the bigger concentration of Bermuda-based operations in its balance sheet since XL's acquisition of Catlin Group Ltd. last year. The island state is having full regulatory equivalence under the European Union's Solvency II regulatory regime.
The strategic move by XL Catlin goes against the trend of the past ten years where several insurers and reinsurers with major operations in Bermuda have redomesticated to domiciles in Europe. To effect the move, a new Bermuda exempt company, XL Group Ltd., will replace XL Group P.L.C. as the ultimate holding company for XL Catlin.
According to the company the relocation would take place by the third quarter of 2016, adding that the change was expected to have no material impact on its financial results including its global effective tax rate. "Establishing our corporate home in Bermuda is a natural step for XL", CEO Michael S. McGavick says. "The company has had a presence in Bermuda since 1986, which grew significantly following the transformative transaction with Bermuda-based Catlin last year."
Although XL established its headquarters in Bermuda, its original domicile of incorporation was the Cayman Islands. It redomesticated to Ireland in 2010. In an SEC filing at the time, XL said the move to Ireland was in part driven by a desire to disassociate itself from tax havens and that Cayman did not have tax treaties with the United States and the European Union. (vwh/mst)
On the picture: Michael McGavick, Chief Executive Officer XL (Source: XL Group)