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Loeb reinsurer says Paulson exit eased tax scrutiny on industry

Bermuda-based Third Point Re takes on underwriting risks from U.S. mortgage guarantors and auto insurers and has added staff to win more contracts.

By Katherine Chiglinsky | Updated on June 15, 2016
The IRS has never clearly defined how much insurance a company must sell to qualify for the favorable tax treatment. (Photo: Shutterstock)

(Bloomberg) – Dan Loeb’s Third Point Reinsurance Ltd. said scrutiny of the industry’s offshore tax advantage has lessened after hedge fund manager John Paulson closed a venture that stood out as an “outlier” for its aggressive use of strategies that were criticized as abuses.

The Paulson reinsurance operation “had no employees, they wrote very little business and they had a big amount of capital sitting offshore. And I think that got a lot of attention,” Third Point Re Chief Executive Officer John Berger said Wednesday at a conference held by Morgan Stanley. “Well, that’s off the table now, they shut that down. So I think the pressure to do something about that has diminished.”

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