California Earthquake Authority Shuns Offshore Entities

December 26, 2002

The California Earthquake Authority decided it will no longer conduct business dealings with U.S. companies that relocate in name only to offshore tax havens. According to the Sacramento Bee, state Treasurer Phil Angelides promoted the change in policy.

As a result of the vote, Bermuda-based reinsurers Everest Reinsurance and PXRE Corp., will be excluded from the contract pool for reinsurance in 2004. That exclusion rests on the condition that the authority can find replacement insurers.

Angelides implemented a similar policy in the treasurer’s office in July on behalf of some $45 billion in investment funds.

The California Public Employees’ Retirement System and the California State Teachers’ Retirement System have also adopted similar policies.

Both Everest Reinsurance and PXRE Corp. have contracts in place with the Earthquake Authority for 2003.

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