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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (5647)	2/18/2002 8:48:22 PM
From: Logain Ablar	Read Replies (2) \| Respond to of 33421

Ray: The insurers did not incorporate in Bermuda to avoid US taxes. They did do it to avoid some of the US insurance regulatory burdens. As an example with the 9/11 events there have been over 10 insurers capitalized in Bermuda since 9/11 (with over 15B in capital (all reinsurers). They would still be in the preliminary approval stages with a state insurance department for license approval (takes 3 to 6 months and for all states can eaisly take more than a year. Under the subpart F rules of the code the US shareholders are subject to their proportionate share of the new companies income if they are deemed controlled foreign corporations (of which at least 5 are). So tax avoidance was not a factor nor primary concern. On the manufacturers like Ingersoll Rand and Stanley I guess it will be time to revisit the tax law. Note though these US manufacturers are not sheltering their US domestic operations (which are still subject to tax) but sheltering income being repatriated to the parent from foreign operations / sources.