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New PFIC regs released, relevant to ILS & hedge fund reinsurance strategies

The U.S. Internal Revenue Service and Department of the Treasury has published a new set of proposed regulations relating to passive foreign investment companies (PFICs), which are relevant to many in insurance and reinsurance, but have particular relevance to certain ILS and hedge fund reinsurer strategies it seems.The updates to read the full article →

U.S. tax reforms could see some ILS structures CFC or PFIC classified: Mayer Brown

Reforms under the new Tax Cuts and Jobs Act (TCJA), adopted in the U.S. in December 2017, means that some insurance-linked securities (ILS) structures could be classified as a controlled foreign corporation (CFC) and others could be classified as a passive foreign investment company (PFIC), according to Mayer Brown's Global read the full article →

Bermuda’s regulation enhances business opportunities: Brad Adderley

Bermuda’s mature, sophisticated regulatory environment has aided its development into a world-leading hub for reinsurance and insurance-linked securities (ILS) business, and according to Appleby’s Brad Adderley, change in regulation has enhanced business opportunities, not diminished them.Brad Adderley, Partner, Corporate at lawfirm Appleby in Bermuda, speaking at a recent Artemis executive read the full article →

ABIR responds to proposed IRS hedge fund reinsurer tax rules (PFIC)

The Association of Bermuda Insurers and Reinsurers (ABIR) has submitted comments in response to the U.S. Treasury Internal Revenue Service's proposed rules targeting the perceived tax issue associated with hedge fund reinsurance strategies.The proposed rules, originally published by the IRS in April, ultimately seeks to address “passive income” issues in read the full article →

No rating impact from offshore reinsurance tax changes: A.M. Best

Insurance and reinsurance rating agency A.M. Best said that it does not expect any impact to any reinsurance firm's it provides ratings for as a result of the recently introduced offshore, or hedge fund targeting, reinsurance tax legislation.The legislation was introduced last week (full details here) by Oregon Senator Ron read the full article →

Hedge fund reinsurance tax legislation introduced by Wyden

Legislation has been introduced by Oregon Senator Ron Wyden stipulating rules under which a hedge fund or hybrid investment / underwriting reinsurance firm would have to ensure a certain percentage of its assets were allocated to underwriting at all times.Wyden, a member of the Senate Finance Committee, has been seeking read the full article →

Canadian regulator OSFI investigating offshore reinsurance

The Canadian insurance regulator, the Office of the Superintendent of Financial Institutions (OSFI), is investigating the use of offshore reinsurance as it seeks to ensure that insurance companies are able to meet their obligations to policyholders if they encounter stress.Speaking at the 2015 Property and Casualty Insurance Industry Forum in read the full article →

PFIC rules could affect catastrophe bonds, sidecars, ILS funds & cells

In current form, the U.S. Treasury Internal Revenue Service's proposed rules for Passive Foreign Investment Companies (PFICs) could impact a number of alternative risk, reinsurance and ILS structures and activities.The IRS released the proposed rules as an attempt to clamp down on a perceived tax loophole, which certain politicians believe read the full article →

ILS & cat bond issuers exempt from commodity pool designation: CFTC

The U.S. Commodity Futures Trading Commission has issued a letter providing no-action relief to insurance-linked securities (ILS) and catastrophe bond issuers seeking exemption from being treated as a commodity pool operator.The U.S. CFTC ’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued the letter on Friday, providing insurance or read the full article →

BOE’s Carney warns on low rates driving capital into reinsurance

The Governor of the Bank of England Mark Carney has spoken out on capital inflows into reinsurance, saying that a 'soft cycle' in the financial markets (referring to interest rates) is driving capital into reinsurance and causing a soft cycle there.Carney speaking today at the Institute and Faculty of Actuaries read the full article →