Move due to a new tax law
By Jonalyn Cueto
Feb 01, 2024 ShareAfter announcing plans to set up a Class 3 reinsurance carrier in Bermuda four years ago, Accelerant has decided to change plans and focus on the Cayman Islands instead, a report from The Royal Gazette revealed.
Early in January, the Bermuda Monetary Authority canceled Accelerant’s respective Class 3B Insurer registration, following the company’s request. According to the report, the parent company decided to set up the operation in the Cayman Islands instead.
Because of this change, credit ratings agency AM Best has withdrawn its ratings for Accelerant Re Bermuda, citing the parent company “made the strategic decision to establish a licensed affiliate in Cayman to act as an internal reinsurer instead.” AM Best noted, “At the time of the withdrawal, the outlook of the credit ratings was stable.”
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In 2022, AM Best assigned Accelerant Re (Bermuda) a financial strength rating of A- (Excellent), a long-term issuer credit rating of “a-” (Excellent) and an outlook of stable.
The report said a final rating could not be produced for Accelerant Re due to its canceled insurance registration as well as the absence of insurance liabilities.
An insurance industry executive told The Royal Gazette that some insurance companies in Bermuda are moving to the Cayman Islands due to Bermuda’s Corporate Income Tax Act. This new law brings the island in line with the Organisation for Economic Co-operation and Development’s global minimum tax regime.
According to the report, this applies to firms that did business only in the US, where the same rules would not apply.
The company’s move to the Cayman Islands means staff, including some Bermudians, will be moving there.
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