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Bermuda was first settled in 1609 by shipwrecked English colonists headed for Virginia. Tourism to the island to escape North American winters first developed in Victorian times. Tourism continues to be important to the island's economy, although international business has overtaken it in recent years. Bermuda has developed into a highly successful offshore financial center. Davis & Rusch Bermuda is one of the most popular jurisdictions for insurance activities and the principal domicile of captive insurance companies. Bermuda is also a world leader in reinsurance markets. For the past thirty years, major reinsurers have been relocating their operations to Bermuda from more traditional markets, such as London, due in large part to low taxes and lighter regulation. In recent years, two major British insurers and Lloyd's mainstays, Hiscox PLC and Omega Underwriting PLC, announced plans to move their headquarters to Bermuda.
Bermuda insurance companies offer significant advantages with regard to tax regulation and estate planning. Many countries offer benefits for the owners and beneficiaries of insurance policies. Premiums may be deductible for tax purposes. In some cases, insurance policies may be used wrap investment products thereby expanding the tax deductibility of premiums paid which can include dividends, capital gains, and total investment return. Another major advantage is the deductibility or exclusion from estate taxes when benefits are paid. Additionally, these insurance products may be used by residents of certain jurisdictions to avoid the forced heirship regulations of their home countries.
Bermuda insurance policies also offer policyholders and beneficiaries an added layer of financial privacy and confidentiality. Many jurisdictions require disclosure of the existence of any foreign financial account or interest in a foreign trust. However, most of these jurisdictions do not view insurance policies as financial assets, but as contractually based agreements between the individual and the insurance company. Accordingly, policies are generally exempt from disclosure. An appropriate insurance policy can give the policyholder additional confidentiality and privacy through a "Private Act" confidentiality clause. Bermuda law requires insurance companies to withhold all information relating to any policyholder or policy. All disputes over disclosure will be physically adjudicated in Bermuda under Bermuda law.
Bermuda insurance companies offer significant advantages with regard to tax regulation and estate planning. Many countries offer benefits for the owners and beneficiaries of insurance policies. Premiums may be deductible for tax purposes. In some cases, insurance policies may be used wrap investment products thereby expanding the tax deductibility of premiums paid which can include dividends, capital gains, and total investment return. Another major advantage is the deductibility or exclusion from estate taxes when benefits are paid. Additionally, these insurance products may be used by residents of certain jurisdictions to avoid the forced heirship regulations of their home countries. Bermuda insurance policies also offer policyholders and beneficiaries an added layer of financial privacy and confidentiality. Many jurisdictions require disclosure of the existence of any foreign financial account or interest in a foreign trust. However, most of these jurisdictions do not view insurance policies as financial assets, but as contractually based agreements between the individual and the insurance company. Accordingly, policies are generally exempt from disclosure. An appropriate insurance policy can give the policyholder additional confidentiality and privacy through a "Private Act" confidentiality clause. Bermuda law requires insurance companies to withhold all information relating to any policyholder or policy. All disputes over disclosure will be physically adjudicated in Bermuda under Bermuda law.