Tag Archives : tax

FERMA speaks out to change misperceptions of captive insurance

FERMA has launched a campaign to change misperceptions of captive insurance by tax authorities and other public bodies.

Click here to read the position

Click here to read the position

As a starting point, FERMA has today published a position paper on captive insurance companies, which it will submit to the OECD so that the views of European risk managers are considered when the OECD discusses the implementation of its Base Erosion and Profit Shifting (BEPS) measures with member governments.

FERMA will urge its 22 member associations across Europe to use the position paper to approach their national tax authorities, who will be responsible for deciding how to implement the BEPS measures, to explain the real risk management value of captives.

In light of the latest corporate transparency and anti-tax avoidance measure at European Union level, FERMA will also reach out to the Commission and Parliament to increase their understanding of the role of captives in the European economy. This follows the adoption in July of the Anti-Tax-Avoidance (ATA) Directive by the Council of the EU.

Jo-WillaertJo Willaert, the President of FERMA, said: “Captives serve an important enterprise risk management role for European business and other organisations. We believe it is important that EU tax authorities understand better how European captives operate to preserve these risk financing capacities. This is not about tax, but a fear that the administrative costs of owning a captive will become uneconomic.

FERMA will also raise the issues at the European Insurance and Occupational Pensions Authority (EIOPA) stakeholder group through its representative Marie-Gemma Dequae.

Key points in the paper include:

• Captive insurance enables European businesses to increase their capacity to take risk;
• The parent company gets a tailor-made risk coverage and pricing, and it can target risk reduction more effectively thanks to better loss information;
• Captive insurance contracts are genuine risk transfer transactions with pricing based on the same approaches as commercial insurers;
• European captives are regulated as other insurance entities under Solvency II;
• Many aspects of captive operations, such as the payment of insurance premium tax in source countries, demonstrate their genuine, non-tax functions.

Said Jo Willaert: “We find it ironic that Solvency II was designed to include as much as possible captives as normal regulated insurance companies, despite requests from the risk management community for more proportional regulation, and now BEPS and Commission initiatives are differentiating captives from the rest of insurance companies.

BEPS and EU anti-tax avoidance and financial transparency initiatives will be the subject of a risk managers only discussion at the FERMA Seminar in Malta on 3 and 4 October. There will also be a presentation on captive insurance and cells in Malta. For more information, see http://archives.ferma.eu/ferma-seminar-2016/

Report available: Corporate Transparency – Working Breakfast at the European Parliament on 28 June

Click above to read the report


Successful response to the European Commission’s proposal on country-by-country reporting requires a strong partnership between audit and risk management

Jonathan Blackhurst, Head of Risk Management at Capita (UK)

Jonathan Blackhurst, Head of Risk Management at Capita (UK)

Internal auditors and risk managers have a key role to play in ensuring that future financial transparency standards are well understood, embedded into the strategy of large corporations and become a source of competitive advantage, the European Confederation of Institutes of Internal Auditing (ECIIA) and Federation of European Risk Management Associations (FERMA) stated after a breakfast meeting today at the European Parliament.

MEP Jeppe Kofod hosted the meeting on the proposal published on 12 April 2016 by the European Commission to extend country-by-country financial reporting to most multinational groups operating in the EU.

On behalf of FERMA, Jonathan Blackhurst, Head of Risk Management at Capita (UK) said:
“Country-by-country reporting will result in the publication of a large amount of highly technical information. While this is the responsibility of CFOs, risk managers have a strategic advisory role to play in ensuring that the figures are put into the context so they show where economic value is created along the whole company’s external and internal supply-chain.”

Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy)

Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy)

On behalf of ECIIA, Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy), said:
“Internal audit can contribute to the quality of transparency by giving assurance on corporate culture, on the risks and on company processes that generate figures and information for country-by-country reporting. This is useful not only for compliance matters but also to promote confidence between corporations and all stakeholders.”

FERMA and ECIIA believe that a strong three-way partnership between the Chief Financial Officer, Chief Audit Executive and Chief Risk Officer is essential to support good governance, sustainable growth, sound investments and job creation:

“Increased corporate transparency is pushing large corporations to adapt their internal organisation to new models, with both risk management and internal audit professions at the forefront of this evolution,” according to Typhaine Beaupérin, FERMA CEO.

“Because these new requirements mean a new collective responsibility for ensuring compliance with the reporting obligations, the board and senior management will need to rely on professionals to adjust and possibly turn corporate transparency into a competitive advantage globally.”, stressed Pascale Vandenbussche, ECIIA Secretary General.



Press contacts:

FERMA media coordinator

Lee Coppack


Tel: +44 (0) 208 318 0330

+44 (0) 7843 089904