Global Indemnity redomiciles to US, slashes subsidiaries in simplification push

Global Indemnity, a specialty property and casualty insurer currently domiciled in the Cayman Islands, has completed the redomesticating the firm and its Bermuda arm Global Indemnity Reinsurance (GI Bermuda) to the US.

Additionally, GI Bermuda has merged with and into Penn-Patriot Insurance Company, a Virginia-domiciled subsidiary of Global Indemnity Group. The merger resulted in the assumption of GI Bermuda’s business by Global Indemnity’s existing US insurance company subsidiaries.

The company said that the redomestication and related transactions simplify and streamline its organisational, statutory and regulatory structure, and will deliver efficiency and cost savings.

Four Global Indemnity subsidiaries were eliminated, including substantially all foreign subsidiaries. The transactions also reduced the number of nations governing Global Indemnity from four to one, and reduced the number of nations in which Global Indemnity is subject to material taxation from three to one. The US is now Global Indemnity’s only governing, regulating and taxing nation.

The move saw the group eliminate approximately $1 billion of inter-company indebtedness and $174 million, or 57 percent of its external indebtedness, reducing its debt-to-capitalisation ratio from 29 percent to 15 percent. It provided the parent company with approximately $250 million of cash and investments.

The company’s shareholders approved the redomestication plan. Global Indemnity Group is a Delaware limited liability company classified as a partnership for federal income tax purposes, and replaces the Cayman Islands based corporation as the publicly listed parent company of GI Bermuda. The former shareholders of the Cayman-based group become shareholders of the new parent company.