HAMILTON, Bermuda — Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR), has praised an intergovernmental agreement signed by US Consul General Robert Settje and Bermuda Minister of Finance E.T. “Bob” Richards to implement the Foreign Account Tax Compliance Act (FATCA).
The agreement, which signals international cooperation on tax law enforcement and compliance, seeks to promote transparency on tax matters.
“I would like to applaud both the governments of Bermuda and the United States for working together to improve international tax compliance and ultimately strengthen the economies of both nations,” said Kading. “As the largest supplier of catastrophe reinsurance to US insurers, Bermuda has a strong relationship with the United States that has only been reinforced through this agreement.”
Over the last 12 years alone, Bermuda’s insurers and reinsurers have contributed an estimated $35 billion in catastrophe claims payments to their US clients, including $2.5 billion in response to the World Trade Center tragedy, $17 billion for Hurricane Katrina and $2 billion following tornado outbreaks from 2010 to 2012. This amount now also includes the estimated $3 billion in reported losses by Bermuda’s reinsurers for Hurricane Sandy.
In remarks made during the signing of FATCA, Richards commented that the agreement “emphasizes Bermuda’s commitment to international cooperation in tax matters to fight against cross boarder abuse tax laws.” Richards noted that Bermuda now has 41 bilateral tax information exchange agreements (TIEAs) in place globally and has multilateral agreements that result in tax cooperation agreements with 60 jurisdictions globally.
Echoing the finance minister’s sentiment, the US consul general remarked in his press release that the agreement continues the “long tradition of friendship and collaboration that marks the United States-Bermuda relationship.”
The FATCA agreement builds on the 1988 bilateral tax information exchange agreement between the two nations. In 2010, the United States enacted FATCA to obtain information on accounts held by US taxpayers in foreign countries. The signing of the Bermuda FATCA agreement will now require foreign financial institutions to identify and report annually information about US account holders directly to the US Internal Revenue Service (IRS). Bermuda also has in place with the United States the Mutual Legal Assistance Treaty.