Clinton: “End Bermuda Reinsurance Loophole”

January 13, 2016

[Updated] “High-income money managers have used loopholes related to foreign reinsurance – often located in Bermuda – to avoid paying their fair share,” U.S. Democratic presidential candidate Hillary Clinton said, adding that she would “end the Bermuda reinsurance loophole.”

Her official campaign website recently released her plan to “build on the Buffett Rule and end the private tax system for the wealthiest” saying the “tax code is rigged to favor multi-millionaires and billionaires who can exploit loopholes and shelter income in order to avoid paying their fair share.”

Hillary Clinton official Secretary of State TC Bermuda Jan 13 2016

As it pertains to Bermuda, her campaign website said, “Shutting down the ‘private tax system’ for the most fortunate, starting by immediately closing egregious loopholes. Hillary will call for strengthening the Buffett Rule by broadening the base of income subject to the rule.

“This means immediately closing egregious loopholes, like the Bermuda reinsurance loophole and the “Romney loophole” that let the most fortunate avoid paying their fair share.”

It also added, “End the Bermuda reinsurance loophole, and tax gaming through complex derivative trading: High-income money managers have used loopholes related to foreign reinsurance – often located in Bermuda – to avoid paying their fair share.

“And they take advantage of complex derivative trades to lower their tax bill. Clinton would build on proposals from both Democrats like President Obama and Republicans in Congress to close down these two loopholes.”

Mrs Clinton also made reference to other islands, telling MSNBC: “We’re now in a position, I think, where we can go after some of these schemes that you did read about, the kind of misclassifying of income, trying to make it look like it’s a capital gain when it’s really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”

She is the second Democratic candidate to reference Bermuda, with Bernie Sanders — a Senator also running for President —  telling CNN, “What I have said is that I want to rebuild America’s crumbling infrastructure, create up to 13 million jobs rebuilding roads and bridges, and we do that by doing away with the ability of corporations to stash their money in tax havens like the Cayman Islands and Bermuda.”

It is not unusual for Bermuda, and other jurisdictions, to be brought up during elections overseas, with President Barack Obama’s campaign targeting Republican candidate Mitt Romney’s connection to a Bermuda company in the 2012 U.S. Presidential Election, and during last year’s election in the UK, then-Labour leader Ed Miliband made public statements about the British Overseas Territories as it pertains to a beneficial ownership register.

Update 3.22pm: Bermuda Business Development Agency CEO Ross Webber said, “During this election campaign in the US, it would be helpful for the political candidates to understand that Bermuda’s insurance industry comprises the same companies that paid nine percent of 9/11 claims.

“Bermuda based insurers paid $22 billion to rebuild the US Gulf and Florida coasts after devastating storms—and contributed an estimated $35 billion to cover US catastrophe losses over the past dozen years. These companies also support 25 percent of Americans’ medical liability insurance and reinsurance.

“The fact is, Bermuda-domiciled insurers and reinsurers play a critical role in the US and global economy.

“Anyone trying to convince the American public these very real companies, with bricks-and-mortar and thousands of dedicated employees—including nearly 17,000 in the US—are simply tax avoidance vehicles, is neglecting the business, economic and social reality.”

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  1. Marge says:

    I think the world has had enough of the Clintons !!!!!

    • The world has had enough of Trump.

      • Double S says:

        You support the same type of bombastic and divisive politicians.

        Trump is more your style than anyone else’s on this thread.

      • aceboy says:

        You make a whole pile of assumptions. Do you agree with Hilary now? You want to see International Business leave this island? Seriously? Well, please hold your breath, because every single democrat candidate says the same thing to drum up support, then quietly allow it to “go away”. This is just electioneering, something you are prone to falling for alot.

        • yess says:

          The democrats say this every time during an election campaign and they never end the Bermuda reinsurance loophole.

          It’s nothing to get worked up about.

    • Whistling Frog says:

      Mrs> Clinton is right. And its not just the reinsurance companies, its also the one percent of the rich who have gotten off with a slap on the wrist. With the money these reinsurance companies are rigging Bermuda should be out of dept if they were paying their fair share of taxes. Ask any corporate lawyer, but their not gonna tell…

      • jt says:

        Bermuda’s standard of living was amongst the best in the world due to these companies. What more were you expecting?
        Our debt is our own fault. Don’t blame IB.

        • Legalgal says:

          Not “best”, “highest”. A very misleading statistic. And skewed by the 1%.

          • jt says:

            We were too busy complaining about 1%ers and comparing ourselves to them to figure out how well off the rest of us were.

    • The Clintons were personable, humane. Trump will destroy the world. He seems to present as having minimum morals and presents as being part of the antichrist!!

      • aceboy says:

        Humane? LOL I suggest you have a wee poke about the internet. The number of people who had potential to harm the Clinton’s financially or reutationally who have gone missing and/or shown up dead from unexplained accidents is quite astounding.Use the seach term “Clintons body count”.

  2. Well then says:

    This woman is crazy. We as a country rely on reinsurance in order to sustain our economy. We can’t all be fishermen, we don’t have raw materials to sell and we can’t rely on tourism and compete against 3rd world islands and countries. If this lady thinks we would back down from being a loophole then she is going to get one hell of a shock when we wont back down. Tired of America ruining other people’s industries and lives for their own benefits.

    • yess says:

      How would we back down? We import everything we have from the US.

    • Jus' Wonderin' says:

      If they really decide to close this loophole…there’s NOTHING we can do as Bermudians PERIOD to stop her lmfao.

  3. Triangle Drifter says:

    Just like Obama, Clinton is no friend of Bermuda

    • The Tea Party chairleaders are right on time.

      • jt says:

        At least we know where you stand on Bermuda’s future.

      • Double S says:

        As I stated on earlier post, you display the characteristics of the average Tea Partier more than anyone else on this thread.

        You support Pres. Obama simply based on the color of his skin as time and time again you have displayed that your ideology is the polar opposite of Pres. Obama’s.

        For instance Pres. Obama is pro immigration (both legal and illegal). You hate any foreigners and seek to disenfranchise people who have resided and contributed to BDA for at least a quarter of a century.

        You hate gays and same sex marriage and label it as a ‘nasty European habit.’ Under Pres. Obama’s administration the LGBT community has seen more rights conferred upon them including the right to be married.

        Your below beliefs are 100% aligned with Tea Party ‘patriots:’

        - hate all people that differ than you visually or ideologically
        - threaten violence and unrest because your side isn’t in power
        - threaten to shut down this island and take ‘your’ island back

        For each one of your comments I can find similar if not exact quotes from a Tea Partier.

        etc.

        So again, you are the antithesis of what Pres. Obama stands for and simply root for him based on skin color as opposed to actual political and social beliefs. Your hateful mindset is much more akin to what the US Tea Party represents.

    • Coffee says:

      I’m sorry , but , the republicans under George H Bush damaged Bermuda by pulling out the military . Dr.Brown allowed the Uighers in , Hillary knows this and there is absolutely nothing she or any other democrat can do to disturb the business . Obama was talking about offshore companies and Bermuda years ago , Dr.Brown had the answer !

      • James Rego says:

        Coffee says:
        January 13, 2016
        I’m sorry , but , the republicans under George H Bush damaged Bermuda by pulling out the military.

        In 1996 when the US pulled out of Bermuda, Bill Clinton was president. Please get your facts straight, your spinning is obvious!

        • Come Correct says:

          You expect straight facts when 90% of them defended a 17 year old pulling chase on a white plate with a passenger (among other reckless moves I won’t/probably can’t mention). Come on now.

        • Coffee says:

          Sam Donaldson , a republican reporter did a damning story on the base in ’90 G.H.BUSH ordered the winding down which was completed in ’96 .
          It feels good to school people such as yourself ! I don’t expect you to admit it because of your superiority complex but hey … Spin away John .

          • James Rego says:

            @Coffee
            A few minutes research online reveled this from Wikipedia.

            Clinton was elected president in 1992, defeating incumbent George H. W. Bush.

            In 1992, a scathing investigative report by Sam Donaldson, of ABC News.

            By the way, Sam Donaldson was anything but Republican. Please do a little better research if you want to discuss a point, otherwise it appears to be spin.

            • Coffee says:

              Omg you aren’t smart enough to know what you don’t know

              .. 1992. September 30. The US Navy’s Naval Facility (NAVFAC) Bermuda was decommissioned.

              Only fools and tools uses Wikipedia for serious debate …

              • James Rego says:

                @Coffee
                Where do get this information? I was here when it happened, where were you? I may not remember exact dates (that is why I use the internet) but I clearly recall how and when this took place, and I clearly remember Bill Clinton signed off on the closing!

                From http://www.globalsecurity.org/military/facility/bermuda.htm
                Naval Air Station Bermuda [NASBERM] officially marked the end of more than a half century of American military presence on the island with a ceremony 02 June 1995. Navy personnel turned over all air operations to the Government of Bermuda on June 1, including weather forecasting, air traffic control, electronic maintenance and fire fighting. American military personnel have operated and maintained the island’s only airfield since 1941. NAS Bermuda remained open until August 31. The official decommissioning ceremony was scheduled in early June because of the rapid drawdown of military personnel after the turnover of air operations.

                This is the end of our discussion, you obviously have a problem with facts and need to twist to suit your perceived version of history.

          • serengeti says:

            You lot love trying to rewrite history don’t you.

            • James Rego says:

              Just stating facts. Do you have a problem with facts?

              One more fact: the Democratic Party of the US has never (in my opinion) been a friend of Bermuda. And those who support them (in my opinion) do not support Bermuda. Do you support Bermuda?

              • serengeti says:

                I was actually being critical of Coffee, and his re-writing of history.
                Sam Donaldson’s reports were in 1992 and 1993.
                GWBush did not order the wind-down of the US base. It was the Clinton administration.
                I think you and I are pretty much on the same page.

  4. Cup Of Tea Anyone? says:

    she might not even be around much longer if they send her jail for National Security breaches. this woman has a trail of stink hundreds of miles long.

    maybe she should drink more tea.

    toodles!

  5. Jr Smith says:

    political rhetoric this get spewed from there mouths every election that comes up. the truth of the matter is that the USA cannot afford to force companies to pay more taxes especially in the reinsurance sector. nothing will come of this just like trumps campaign…..

  6. Mike says:

    Bermuda today. Delaware tomorrow.

    I don’t think so.

  7. aceboy says:

    “This woman is crazy. We as a country rely on reinsurance in order to sustain our economy. ”

    What’s really crazy is that Bermuda thinks that another country owes you something.

  8. Izzypop says:

    This is the same women who was here few years back singing our praises. Now she wants to kick us in our teeth.
    No worries. Bernie S is gonna kick your a**

    • Fsbod says:

      I’m sure bernie will do the same thing.

    • Jredmond says:

      You don’t think Bermie wants to close tax loopholes too? If anybody, Bernie is the one most likely to do so. With Clinton it’s just rhetoric.

    • Double S says:

      Bernie Sanders would be even worse for Bermuda!

  9. jt says:

    I’m guessing this will have no impact on the manner in which the Clintons manage their wealth. It’s all about which loophole.

  10. swing voter says:

    So….when the natural disaster insurance payout is due after the next hurricane, tornado, or 9-11 event, lets see which companies pay out the quickest. You don’t hear these politicians say shyte when the shyte hits the fan.

    Just look at the way the US based insurers treated the new jersey hurricane victims…Americans paying their premiums religiously and receive pennies on the dollar to ‘repair’ their homes….Shameful

  11. KODII says:

    I totally understand and i agree that “Bermuda” relies on reinsurance, but if “Bermuda” didn’t throw away tourism 75%, we wouldn’t be in such a frantic about this news for the second time around. We have a Beautiful island to offer. Reinsurance was and is fast money for our economy. Time to hit the books and reevaluate and look forward to other sources of income.

  12. ron,b says:

    it would be good for bermuda, we have lost our culture due to these int companies, and the people they bring here,this beautiful small island and its locals have been polluted

    • Double S says:

      It would be good to lose the industry that provides over 75% of our much needed foreign currency earnings?

    • Anbu says:

      Go back to sleep.

    • Whistling Frog says:

      @ron,b:

      What culture? We’re a mix bag of nuts…

  13. Joonya says:

    Someone please ask this woman where she thinks the reinsurance payout comes from for many of her country’s natural catastrophes such as hurricanes, etc..

    • aceboy says:

      “Someone please ask this woman where she thinks the reinsurance payout comes from for many of her country’s natural catastrophes such as hurricanes, etc..”

      You act like that insurance money comes from bermudians.

  14. theothersidebda says:

    She is not referring to reinsurance as most people know it. She is referring to a rather obscure type of reinsurance play that is very limited (maybe 2-3 exist currently on island) more commonly referred to as “hedge fund” reinsurers. And yes, it is a unashamedly marketed to investors as a tax play. She is not talking about ACE or XL or any of the other companies that many people work for and associate with insurance/reinsurance in Bermuda. Nothing to see here and I’m a bit surprised at BBDA’s off based comments for not understanding the specific tax dodge she is referring to.

    • Somers says:

      Agreed! BBDA needs to get their act straight if they are to attempt to lobby on behalf of Bermuda!?
      We owe the U.S. nothing and have so much to lose if we don’t get this right.

  15. Somers says:

    Clinton isn’t referring to regular reinsurance that paid out the 9/11 attacks claims, hurricanes or other catastrophe claims, et al. She is referring to derivative traders and namely ILS (Insurance Linked Security) companies that have set up here with ultra high net worth trading/investment “gurus” leading the helm in New York and “insurance” type vehicles set up here for tax efficiencies. ILS is the only growth area in Bermuda right now, so this would indeed be a devastating blow. It has already come under attack in the New York Times and some other U.S. media numerous times. BBDA needs to get their facts straight perhaps so that someone can lobby these politicians. It’s going to be a tough arguement however, to win as it has always been ‘on the bubble’….

    • Thank you says:

      Monitor Mercury Capital and other ILS companies with no Bermuda ties.

    • theothersidebda says:

      Its quite off base to lump ILS into this camp. Investors in ILS are seeking uncorrelated returns. They are not what she is going after. She is going after the asset manager who have no real desire in taking insurance risk, but rather simply park their money in a “reinsurer” who takes very little risk and in turn manages the investment portfolio of the “reinsurer” in very much the same investments as the parent hedge fund…the difference being that the profits of the reinsurer’s investments are taxed deferred and then ultimately taxed at long term capital gains rather than ordinary income rates. Nonetheless, in the end, its all just posturing and nothing will happen.

  16. Truth is killin' me... says:

    Take YOUR money out of Bermuda first Clinton!

  17. The REALIST says:

    How bout this…..F*** Clinton’s F*** Trump!!! Ben Carson!!!!

    • steve says:

      Clinton/Democrats arn’t really thinking about harm to Bermuda in fact they likely wish BDA and the financial jurisdictions world over… all the best or more likely think firstly of the United States. Much like the way Bermuda is not particularly interested in the financial well being of Finland. What she is saying is that American companies should not domicile in order to avoid paying taxes that could support the services of her great country, the very same country most whole/partly owe for their great fortune.
      For our sake,I hope it does not happen,however I find it easy to see the logic

    • Somers says:

      I will not be voting this time, unless by some miralce a new candidate appears that has a brain.

    • wahoo says:

      Why Carson? Please explain quickly.

    • Kathy says:

      Bernie Sanders!

  18. Unbelievable says:

    I generally support Clinton (if I was American) but Ross Weber has made a very persuasive response. Well done.

    • Somers says:

      His response was appropriate to remind people in ‘general’ terms of the importance of Bermuda reinsurance and its role in the world regarding some natural disasters and acts of war, etc ….but it is off the mark entirely as to what these politicians are coming after us for. The U.S or U.K. based derivatives / hedge fund managers and traders that have offshore (ILS) or hedge fund type insurance vehicles in Bermuda for tax efficiencies are under fire. This type of ‘insurer’ has nothing to do with the above and is very much under scrutiny and risk. We certainly need a bit of PR spin that he provided, but we also need to dissect this issue closer under the microscope when crafting our replies, with more specifics. Otherwise, we are dead in the water. Yes, we are an incredibly important part of the world’s reinsurance market, but there are pockets that fall between the lines and this is what Clinton and others are looking to shut down.

  19. john galt says:

    never let the fact she is one of the biggest liars, caught taking massive money in the clinton foundation in return for state dept contracts… she even got something like 140 million for giving the state depts approval to selling 20% of the uranium in the states to a russian state owned company.

    now she tells us about “fair shares”

    lol she means more money in her money laundering syndicate

  20. aceboy says:

    “never let the fact she is one of the biggest liars, ”

    Then don’t vote for her

  21. I wonder why we virtually never hear any of these complaints directed at Ireland? They offer the exact same types of setups but we rarely hear them being targeted and mentioned by name, the way us smaller juristictions are. There couldn’t possibly be some kind of protectionist, denial for fear of offending all those Irish descendent voters could there? Just the slightest hint of the usual hypocracy.

    • Kathy says:

      Agreed, but any loopholes closed will affect Ireland as well.

      • Walk in their shoes says:

        Doesn’t Ireland, as a EU nation, get the blind eye treatment from the US/EU when it comes to slamming ‘tax havens’?

  22. wahoo says:

    Obama had the same stance, all Dems do but it is all talk because they all get lobbied. Bermudians flew off and supported Obama but never gave any thought to his or more importantly the democratic philosophy….I wonder why…..I love it!

    Trump sucks, Hillary sucks, politics sucks and Monica….well you know.

  23. Try It says:

    Buffett Rule is this Berkshire Hathaway which in turn owns multi mega companies. I would bet that some of Mr W Buffett’s companies have some sort of presence here despite his thoughts. Mind you I have always felt he should run Bermuda with his astute business skills. Kinda stuck between a rock and a hard place we are. There is a HUGE target on our island which can not be overlooked.

  24. Bermynick says:

    Usual election year posturing. What the US needs to do is just simplify their own tax structure; who makes out are the lawyers and accountants [who lobby the politicians]. Bermuda, who’s tax structure gave re-insurance a competitive edge is held up a villain but we do ourselves no favours when we allow these companies to set up with no local employees, no physical address and paying very little into our own economy. Sort our own sh!t out, we’ll look better. Why DO we allow Google to funnel billions through our banks while we gain nothing?

  25. Sincerious says:

    Another stellar example why politicians should keep their mouths closed. People will soon get to know how little they know or in other words how stupid they really are.
    They will say anything and everything they can to convince the voting public that they actually stand for something. I suggest you read the comments from the current president when he was challenged on what he ran on and what he now says.

    something about( paraphrased) ” well there is the candidate running for the presidency and then there is the reality when you become president”

    the old adage holds true regardless of country – How do you know a politician is lying ? – Their mouth is moving

  26. Kathy says:

    YIKES – let’s face facts – although this statement below is true, if she gets in…bye, bye re-insurance companies – they will have to relocate back onshore and charge higher premiums for everyone to cover their tax bills. HOWEVER – where does that leave us? No tourism, no reinsurance… we had better start thinking fast and hard about our economy… if we think we have hit rock bottom now, just wait!!!!!!!

    “The fact is, Bermuda-domiciled insurers and reinsurers play a critical role in the US and global economy.

    “Anyone trying to convince the American public these very real companies, with bricks-and-mortar and thousands of dedicated employees—including nearly 17,000 in the US—are simply tax avoidance vehicles, is neglecting the business, economic and social reality.”

  27. ALVIN WILLIAMS says:

    Trump is the last hurrah for the mostly white baby boomers who fear America’s changing racial demographics will displace them from their premier place in America; an interesting book to read in this regard.’Diversity Explosion(How New Racial Demographics are remaking America) by William Frey. The sky is falling the sky is falling? One day the sky will fall with respect to international business. Remember high sea privacy was consider legal by many nations until the decision was made to destroy it.

    • I heart 441 says:

      What most people are not aware of is that the caucasian race in the US will become the minority by I think 2035, with the majority race being of Latin/Hispanic background.

  28. Keepin' it Real!...4Real! says:

    If the USA stopped spending money that they don’t have on their military then this situation wouldn’t even be thought about…

    Trump for President…Hillary for Prison!

  29. RoseAnn says:

    Why doesn’t Bermuda take itself off the list. CEO of Endurance stated that Bermuda should collect a tax from his company and others like it and remove this island from the conversation. He said there maybe some pushback by some of his colleagues but but it would be because they are not really invested in the Island like himself who actually lives here as opposed to coming for a board meeting twice a year. Done right, staggered over a period of time those businessmen would pay up…..these companies love BERMUDA not only for tax purposes, but time zone and infrastructure too. It is time that we ask for more and get more funds from those who have more to give. We been through SAGE but what we really need is RAGE. (Revenue Aggregating Government Enterprises). Why cant we have a sports lottery or educational lottery to alleviate our tax burden? I am not an accountant….however……Finance Minister Bob you need to rethink your finances. You allow W&E Mins Craig to reroute a highway, when a couple of large painted arrows in the road would have sufficed, for those people new to driving here in Bermuda; that were having the most problems at that junction. What is the final price for Blackwatch Pass reconfiguration? #imjussayn

    • serengeti says:

      1. If you think IB is falling over itself with desire to bail out Bermuda, you’re wrong. IB already is a huge asset for Bermuda. Bermuda has to sort out its own problems.

      2. In Bermuda a lottery is not going to do much. Given our adult population, how much would it raise? And what would the prize be? Let’s face it, it wouldn’t raise any more money than the average school Christmas raffle.

  30. I’ up for filling loopholes…hell…you show me that hole…an I’ll fill it….by God!

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