ABIR Support Implementation Of ESA Legislation

December 26, 2018 | 0 Comments

Bermuda’s leading international insurers and reinsurers, through ABIR, said they “continue to fully support the Bermuda Government’s commitment to facilitate tax transparency and compliance with global standards and maintain the jurisdiction’s top-class reputation.”

ABIR noted that the Bermuda Government enacted the Economic Substance Act 2018 [ESA] which they said is “intended to meet the commitment made by Bermuda to address certain concerns raised by the European Union’s Code of Conduct Group in relation to the need for relevant businesses to demonstrate economic substance in Bermuda.”

Kevin O’Donnell, President and CEO of RenaissanceRe Holdings Ltd. and current Chair of ABIR said, “This state-of-the-art legislative package further aligns Bermuda’s statutory and regulatory framework with both Bermuda’s prevailing, world-class business practices, and with emerging global standards.

“As the global center of risk transfer, we believe Bermuda’s international business sector already meets or exceeds worldwide requirements. We applaud the government’s legislative reform package which further enhances that framework, and its commitment to ensuring that clients and markets worldwide will continue to benefit from Bermuda’s critical financial capacity and leading risk management expertise.”

“ABIR members are proud of their investment — economic substance — in Bermuda’s economy. Data reported for calendar year 2017 from ABIR members showed ABIR’s aggregate direct economic impact to the Bermuda economy was $842.6 million, including travel, business, charity giving, construction expenses and compensation paid to Bermuda-based employees. Similar economic contributions from companies in ‘relevant activities’ specified in the ESA has potential to greatly enhance Bermuda’s economy,” the organisation noted.

“Starting January 1, 2019, for new companies and July 1, 2019 for existing companies, substance requirements will affect entities carrying out the following activities: banking, insurance, fund management, financing & leasing, headquarters, shipping, intellectual property, distribution & service centres, and related holding companies.

“Bermuda is a world-respected platform for global business that welcomes top-quality corporate brands. The Bermuda government and ABIR member companies are committed to tax transparency, compliance and the implementation of ESA requirements.

“Industries/companies whose regulatory regimes already require substance in the jurisdiction [including insurance] are expected to satisfy the new EU requirements through existing arrangements.”

“ABIR looks forward to continuing to work with the Bermuda Monetary Authority and the Bermuda government on the Economic Substance Act regulatory guidance to ensure efficient and fair implementation of the standards and to avoid any duplicative regulation while supporting the Bermuda economy, said John M. Huff, President & CEO of ABIR.

“ABIR’s members are good corporate citizens in Bermuda and in the worldwide markets they serve, and are prepared to continue to address the world’s critical risk needs.”

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