New York state insurance commissioner Eric Dinallo wants to found a New York Insurance Exchange.
Both state and city have suffered from the ravages of the downturn and losses to Wall Street, so the remaining dollars are looking for a new home. So a new RI exchange might seem like a good idea.
Well, yes, but (a) it’s been done before and (b) if Bermuda is the real place to beat the real issue is that taxation there is, what, 15% less than in NY.
So you could just reduce the tax rate in NY, for the same effect?
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Dinallo does not get the tax impact. Maybe the total tax difference is 15%, I think it’s more, and I don’t think the 15% includes city and state taxes. Dinallo thinks that the tax difference can be made up by the different cost of doing business in NYC vs Bermuda – I don’t think the costs are that difference. If they were, why are so many US companies relocating to Bermuda? For the sun? Bill Berkley has been testifying to Congress for years that unless they do something about the tax differential, Berkley Group will be forced to redomicile to Bermuda to remain competitive. Nice try, but he doesn’t know the reality on the ground.