In response to Andrew Holt's article 'Death of the Rock?' (Features, 8 July), as one of the Rock's largest insurance companies, I'd like to put the current situation in perspective for our broker partners here in the UK.
Firstly, every insurer that has established a presence here in Gibraltar has known that there was the potential for change in the tax-exempt provisions from the moment they set up their operations. Certainly, that was the case for Link and Zenith, and our businesses have been structured to manage such a change should it occur in the future.
Secondly, tax exemption is not crucial to growth in the insurance market here and it is not the primary driver to establishing a business here. The ability to retain profits tax free to help strengthen solvency or increase underwriting capacity is a legitimate reason to register an insurance company as tax exempt, but this does not explain the reason for Gibraltar's success in recent years. Some insurers have in fact not attempted to obtain a tax benefit from the move to Gibraltar and have only registered as tax-exempt because there are various structural - as opposed to tax - advantages arising from this.
The primary driver behind establishing an operation in Gibraltar is the efficiency with which the Commissioner of Insurance processes applications and deals with regulatory matters. It has managed to find that balance between creating a business-friendly regulatory environment without stinting on its approach to regulation.
No matter the outcome of the initiatives to harmonise tax regimes across the EU, which naturally includes Gibraltar, the approachability of the regulator there and the speed of its response has put it streets ahead of the vast majority of EU Member States, and is the secret of its success. Link and Zenith remain committed to the burgeoning financial services community here.
Link Insurance Company