Bermuda?s international insurance companies would not leave an Independent Bermuda provided the economy and the Island?s regulatory and legal systems remained stable, two top insurers told the Bermuda Independence Commission.

But XL Capital chief executive officer Brian O?Hara and Axis Specialty chairman Michael Butt, appearing on behalf of the Association of Bermuda Insurers and Reinsurers, warned that uncertainty over Bermuda going to Independence had the potential to harm the Island?s success as an insurance centre.

And they said, in a transcript provided on the BIC website, that costs after Independence could also have an effect on whether international companies remained.

Both members also emphasised that ABIR would prefer the question to be decided by Referendum and that it would want to see the Privy Council in London remain as the Court of Final Appeal.

Mr. O?Hara and Mr. Butt were responding to questions from BIC member Rolfe Commissiong, who asked: ?Would it be fair to characterise ABIR?s position as follows: that as long as Bermuda has a stable political, economic, regulatory regime along with a reputable legal system, that that would in and of itself, pose no reason for ABIR to seek alternate jurisdictions??

Mr. O?Hara agreed the statement was fair.

Both officials added that the Island?s reputation was under attack from overseas regulators, including Britain?s Financial Services Authority (FSA) and that it was unclear whether the Island would be better able to deal with these threats as an Independent nation.

Asked by BIC member David Rowntree if Bermuda would be more or less vulnerable to outside regulators if it was independent, Mr. O?Hara said: ?It?s not a guarantee that the UK would be supportive or coming to our help, but in the absence of that connection, certainly, we would be on our own, and it?s hard to know how more vulnerable that might make us.

?We?re vulnerable already, but I don?t know, it?s arguable about whether it makes us more vulnerable or not, of course, but, you know, everything has a cost-benefit to it I guess and there?s a cost of being a colony if you will of the UK in terms of not being completely an Independent nation, but maybe there are unforeseeable costs to Independence.?

Mr. O?Hara, who said the association was neutral on Independence, also said ABIR was concerned about increased costs and what effect that would have on taxation, which is a primary reason for the companies being on the Island.

Mr. Butt said if Bermuda became Independent, the process would have to be handled well.

?It?s an absolute key point, how well it?s done,? he said. ?We have very aggressive competitors out there who?d love to see this place fail.

?If we give them the opportunity they will attack. The businesses will, when they start up, go elsewhere. Businesses will be encouraged to move from here by shareholders etc. So it?s the purity, the transparency, the credibility, by which it?s done.?

And he said the Island?s competitors were already using the uncertainty over Independence to encourage businesses to start up elsewhere.

?Uncertainty is played on by our competitors,? he said. ?So, the longer the uncertainty is there, the more our competitors will use it, whether justifiably or not, against us.

He said new businesses considering coming to the Island raised the question of Independence ?because they are being stimulated to ask it by others?.

Mr. Butt said they were asking themselves: ??Am I coming? I?m about to set up in a jurisdiction where there?s gonna be significant political change. Is this wise?? Those type of things, and indeed in the (International Business Forum), the other day, we heard exactly that point from the lawyers ... at the table who were saying that they were already feeling some antagonism, not because of this issue, but for another one.?