Bermuda, looking to jump-start its economy in light of the global financial crisis, has launched a new growth initiative–in part to counter negative publicity about the island’s image as a tax haven for insurers and other firms.
The “Bermuda First” program involves about 60 participants from “across the entire spectrum of Bermuda’s community,” according to its co-chair, Don Kramer, chief executive officer of Bermuda-based Ariel Reinsurance.
Although the island’s government is heading the initiative, “politics have been pulled out of this and it’s strictly bipartisan,” added Mr. Kramer, whose co-chairs include Bermuda Premier Ewart Brown and Kim Swan, the opposition leader.
As part of the initiative, New York-based consulting firm McKinsey & Company has been hired to analyze Bermuda’s economy and develop a variety of strategies to deal with the fallout from the global financial crisis.
“For example, on the financial side, the G-20 as well as the U.S. have targeted what they call ‘tax havens,’” he said. “Bermuda is doing everything it can to deal with that issue of being called a tax haven, when in fact Bermuda is conservative in many respects and is not an offshore tax haven, where money laundering is going through.”
The island’s minister of finance has signed treaties with a number of G-20 members insuring transparency, he added.
The island is also committed to bolstering its image in terms of regulation.
Indeed, the Bermuda Monetary Authority said that as the “Bermuda market weathers the financial crisis, the Authority remains focused on an important medium-term goal–establishing the BMA as a leading risk-based financial regulator through a program which ensures Bermuda’s regulatory framework is recognized as equivalent by other key jurisdictions.”
The BMA said Bermuda is already in a strong position and has had favorable assessments of its regulatory framework for insurance, banking and securities.
Bermuda’s insurance community, according to Mr. Kramer, is backing the BMA effort to come up with “transparent and globally respected regulation so that Bermuda will be considered an effectively regulated jurisdiction.”
He noted that while the insurance industry has grown dramatically in Bermuda, “there is a consolidation going on. That’s going to lead to flat, possibly lower employment.”