IFSC-based reinsurer London Life & General Reinsurance has taken a dividend holiday, a year after it took €22.94 million in dividends from its Dublin unit.

The company, which employs 16 people in IFSC House at Custom House Quay, is owned by the Canada-based Power Corporation, parent of the London Reinsurance Group in Ontario.

Specialising in reinsurance to the international property and the casualty and life insurance industry, its board includes the former IDA Ireland head and current Railway Procurement Agency chairman Pádraic White. Mr White has no shares in the company.

The company is among more than 190 reinsurers in the global industry that have operations in the IFSC, where they enjoy a comparatively low rate of corporate tax. Accounts recently filed in the Companies Office show that its pretax profit rose last year to 7.8 million Canadian dollars (€5.25 million) from C$5.9 million in 2003.

The dividend of C$34 million taken in 2003 was more than five times pretax profits that year. No explanation was offered in the 2004 accounts for the decision not to pay a dividend this year.

The payment of the 2003 dividend left a deficit of C$12.23 million in the company's profit and loss account, down from a retained profit of C$17.19 million at the start of 2003. The profit and loss account had a deficit of C$5.29 million at the end of 2004.

The pretax profit increase last year was recorded in spite of a fall in net premiums to C$566 million from C$729 million.

"The decrease is largely due to premiums arising from the life financial line of business. A retrocession arrangement is in place with an affiliate, to reduce the retained risk to the company from certain property and casualty business," said the directors' report."The life line of the business continues to expand and had another successful year in 2004."

London Life & General Reinsurnace paid C$856,000 in corporation tax last year.

The 2004 payment was marginally ahead of the charge of C$853,000 in the previous year, a sum that included C$266,000 in respect of a prior year under-provision.

"The tax is assessed for the year at a composite rate of 10 per cent on overseas business and 12.5 per cent on Irish business, giving an effective applicable tax rate of 11 per cent," the accounts said. The company paid wages of C$2.28 million in salaries last year, up from C$2 million in 2003. It employs 10 administrative staff and six underwriters.

The company's capital and reserves decreased by C$7 million to C$136 million due to the movement in the cumulative translation reserve arising from the translation of the company's US dollar surplus investments.