NU Online News Service, Jan. 12, 3:40 p.m. EST
XL Capital said it plans to re-domesticate itself to Ireland from the Cayman Islands, and Zurich Financial Services Group has transferred most of its general insurance portfolios in Italy, Portugal and Spain to local branches of its EU-based risk carrier, Zurich Insurance plc (ZIP), which is also based in Ireland.
XL said it is proposing to change the parent holding company’s place of incorporation to Ireland with the parent holding company to be renamed XL Group plc.
To effect the re-domestication, XL said XL Group plc would be a new Irish public limited company and would replace XL Capital Ltd as the ultimate holding company of the XL group of companies. The company’s ordinary shareholders would receive one ordinary share of the new Irish company in lieu of each ordinary share of the company held by them, XL said.
XL added that it expects to submit the proposal for re-domestication to its shareholders in the next several months and complete the transaction on July 1, 2010.
XL said it has operated in Ireland for most of its corporate history and is “very familiar with its regulatory and legal environment.” The company said XL believes Ireland “offers a stable long-term legal and regulatory environment with the financial sophistication to meet the needs of XL’s global business.”
The group’s chief executive officer, Michael S. McGavick, said, “We believe that changing XL’s place of incorporation from the Caymans to Ireland is in the best interests of XL and our shareholders.”
Among other benefits, he said, the proposed move will reduce certain risks “that may impact us and offer us the opportunity to reinforce our reputation, which is one of our key assets, and to better support our global business platforms.”
He said the new ‘XL Group’ name reflects the company’s exclusive focus on providing property, casualty and specialty insurance and reinsurance products.
XL said it does not expect the re-domestication to have any material impact on its financial results.
Zurich, meanwhile, announced the transfer of the vast majority of its general insurance portfolios in Italy, Portugal and Spain to local branches of its EU-based risk carrier, Zurich Insurance plc (ZIP). The transfer is effective as of Jan. 1, 2010.
The company said a similar transfer is planned for its general insurance business in Germany later this year.
ZIP is Zurich’s European general insurance risk carrier based in Ireland. It has regulated branches in Belgium, Finland, Denmark, France, Italy, Norway, Portugal, Spain, Sweden, the Netherlands and the United Kingdom as well as conducting business in Ireland.
The transfers, Zurich said, are part of an ongoing groupwide effort to “simplify Zurich’s legal structure and consequently achieve greater flexibility in its capital management.”
So far, Zurich said the general insurance business in the United Kingdom was transferred to the ZIP UK branch effective Jan. 2009. In addition, most of the Global Corporate division’s business written in the EU has been progressively transferred to ZIP branches since 2005, Zurich added.
Markus Hongler, CEO, Western Europe and Zurich Insurance plc, said, “For Zurich as a Swiss-based corporation, a single EU-based risk carrier with branches in the EU member states is both capital and operationally efficient. It enables us to take advantage of the EU single-market and regulatory environment.”
Zurich said nothing is expected to change for its customers.
Earlier this month, insurance broker Willis Group Holdings Ltd. completed a planned move of its corporate domicile from Bermuda to Ireland under the new name Willis Group Holdings Public Ltd. Co.