Bermuda Insurance Tax War Continues

Mairi Mallon, Royal Gazette

23 November 2000

This story is reproduced by kind permission of the Royal Gazette at http://www.accessbda.bm

The war over the Bermuda Tax loophole before the US Congress is not over, according to a leading UK reinsurance magazine.

`Reinsurance' has in its latest `Bermuda Issue' said that while the battle over tax issues may have been put on hold, it is far from over.

In an article by Adrian Leonard, the magazine states: "Insurers that have moved from the US to Bermuda to reduce their tax bills have for the moment escaped the threatened imposition of a US law designed to stop the tax avoidance.

"Yet the war is not over and the issue is almost certain to resurface after the coming US presidential election."

The issue centres around accusations and lobbies made by four US insurance companies. The big four - Chubb, Hartford Financial Services, Liberty Mutual and Kemper - have waged an intensive campaign on Capitol Hill, but Bermuda-based insurers and the Government are working behind the scenes to have the bill, called HR4192, thrown out.

Chubb, Hartford, Liberty Mutual and Kemper are unhappy about the way Bermuda-based companies are taxed - by ceding premium to parent companies in Bermuda.

The article states: "The four insurers have convinced nine congress members - the latest in September - that something decidedly unfair is happening."

And the article goes on to say that so far the `anti-avoidance' battle has not resulted in debate or law making, because no appropriate legislation was passing through the House of Representatives to which it could be attached.

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