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Archived stories from 2010

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Domicile hopping insurers escape scrutiny

International insurance regulators have admitted that they are losing track of where insurance and reinsurance companies are headquartered. A spokesman for the Insurance and Mutual Assurers Supervisory Society (IMAss) said that many companies are changing their domiciles so frequently it is becoming difficult to know who is based where anymore.

One of the most popular
domiciles for reinsurers

IMAss spokesman Simon Pruedent-Bohr told RISKbitz that his members are concerned that insurers and reinsurers are playing an elaborate game of musical statues to confuse them. "Everytime the music stops we look around and no-one is where we last saw them," he complained. "For example, I could have sworn that Mocha Re was based in Cayman last week and now it is in Luxembourg. Or is it Switzerland?"

Ireland domiciled, Cayman registered, Bermuda headquartered, London located, Hong Kong listed Mocha Re is the latest company to announce that it is redomiciling to the Liechtenstein canton of Bogusz from the International Financial Guinness Centre in Dublin.

The UK's Financial Services Authority (FSA) said that under-resourcing meant its ability to keep up with corporate relocations was contributing to the confusion. "We have got a huge map of the world on the wall that we stick pins into but we would like a bigger one," Colin Nasalspreigh told RISKbitz. "Unfortunately the FSA's new office in the cellar at the Bank of England, our new home, isn't big enough."

One multiplatform insurer is believed to have commissioned corporate headquarters built from shipping containers so that it can move swiftly between locations by container vessel, train or even on the back of flatbed trucks.

Another London insurer said it was considering a deal with the Russian authorities that would allow it to be domiciled on the Mir space station. "We would take a very dim view of any insurer located in space," Nasalspreigh said. "But that's because our new cellar has no windows.

"Insurers and reinsurers usually relocate to take advantage of favourable tax conditions or for a lighter regulatory touch. But that's not the whole picture, according to the relocation specialist at Vacuosity consultants, Vanessa Buskinitt. "Tax isn't the only reason. Some offshore domiciles are simply too overcrowded and there's huge pressure on resources - long queues are forming on the golf courses," she says.

Tagging is one solution put forward by IMAss. "If we could electronically tag these companies it would help us know which financial centre they are currently registered in," Pruedent-Bohr said.


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