Barbados’ vital international business sector has scored a victory over a major regional rival it has tasted defeat against in the recent past.
After years of doing business in Bermuda, United States entity, American Overseas Group Limited, has announced plans to “re-domesticate” its operating subsidiary, American Overseas Reinsurance Company in Barbados.
Company officials including AOG CEO, David Steel, said they had applied to the Financial Services Commission here and were awaiting necessary approvals to complete the corporate relocation, but hoped to do so “effective on or about December 7, 2012”.
In a statement issued out of Bermuda, they said “an application is pending with the Barbados Financial Services Commission for licensing of AORE as an Exempt Insurance Company in accordance with the provisions of the Barbados Exempt Insurance Act 1983”.
“AORE has received confirmation of no objection from the Bermuda Monetary Authority’s Insurance Division of its discontinuance from Bermuda in accordance with the Insurance Act 1978 and intends to file notice of discontinuance under the Companies Act 1981,” AOG management said.
“With its application to the Barbados FSC, AORE has submitted a business plan to begin writing short-tail, non-catastrophe, property/casualty reinsurance business upon its licensing and continuance in Barbados, while continuing to run-off its existing financial guarantee reinsurance portfolio.
“Our strategy is to enhance shareholder value by writing short-tail, P&C reinsurance business complimenting our long-tail financial guaranty portfolio run-off. AORE’s re-domestication is integral to our business plan,” Steel said.
Management also noted that AOG “will remain a Bermuda-domiciled holding company with 100 per cent ownership of the common equity in AORE”, and the company’s affiliated management company, Reid Street Services Limited, “will continue to be domiciled in Bermuda and will continue to provide services to AORE”.
“The re-domestication of AORE and its plan to resume writing new reinsurance business are subject to approval of the Barbados FSC, and the discontinuance from Bermuda is subject to the approval of the Bermuda Minister of Finance. No assurance can be given that such approvals will be obtained,” officials noted.
In the past Barbados has lost some of its international business and financial service businesses to Bermuda. In recent months pharmaceutical company Valeant did so. (SC)