The next US president could have a big impact on the future of Bermuda's insurance industry.

That is according to a number of the Island's top CEOs, some of whom reckon Democrat presidential candidate Senator Barack Obama's threats to shut down tax havens if he gets into the White House are just "election rhetoric" and will not come to fruition, while others are not concerned about whether the Democrat or Republican nominee get into power.

But most agree on one point — that whoever gets in must recognise the importance of Bermuda's insurance industry to the US and its economy.

Despite Sen. Obama not making direct reference to Bermuda, the Island was on a list of jurisdictions taken from Internal Revenue Service court filings identified as "probable locations for US tax evasion" under the "Stop Tax Haven Abuse Act" introduced by Sen. Obama, Democratic Sen. Carl Levin and Republican Sen. Norman Coleman last year.

The Democrats also backed a bill aimed at nationalising part of the insurance business that covers major storm-damage claims, which could have a big knock-on effect on many private insurers in Bermuda.

Meanwhile, Republican presidential candidate Sen. John McCain has pledged to protect Bermuda's international businesses if he is successful in his White House bid. He spent three days on the Island last year meeting business and political leaders and claiming he understood the concerns of the insurance sector about draft legislation proposing a clampdown on US business operations in tax havens.

David Ezekiel, chairman of the Association of Bermuda International Companies, believes that talk of shutting down tax havens may be a good for getting votes, but when it comes to the crunch it is doubtful whether it would ever be put into action.

"I think whenever these elections come up the conventional wisdom would be that the Republicans would be friendly business-wise," he said.

"Usually the rhetoric is just something to talk about and then you typically find once a person gets in a position to do something about it and face the facts, the dire projections do not come about.

"It is clear just how much the US insurance industry relies on Bermuda and the capacity we provide and once they come down to it, and are given the numbers in terms of how much the Bermuda market took in terms of a very big piece of Katrina and Wilma and the other hurricanes and natural disasters, they will realise it is essential capacity for them and anything they do about that will damage the American consumer."

Jim Bryce, CEO of IPC Holdings Ltd., whose business is worth about $200 million in the US alone, said the new incumbent should sit up and take note of the role Bermuda has played in the US insurance market and paying out claims in the wake of big natural disasters such as hurricanes Katrina, Rita and Wilma.

"I think quite frankly, given the importance of Bermuda in helping to fulfil the need of every dire sequence where capacity and availability of reinsurance has really been a problem, Bermuda was always there, as it was in 1986 with XL responding to the US liability crisis.

"Hurricane Andrew created havoc at the time, but again Bermuda responded in terms of capacity and I guess post 9/11 and Katrina we had the same thing.

"So really, in order to understand the importance of Bermuda to the US insurance industry and to the economy of the country, I guess, you really have to appreciate that one of the main engines driving the US is the Bermuda market and I think people do not always really appreciate insurance and, especially, reinsurance because it is sitting behind the insurance carrier.

"It really allowed the economy in the US to bounce back, so I think any leader, whether it been Democrat or Republican, if they are clear-thinking, should realise the Bermuda market is prominent to the success of the US.

"The question that has to be asked is 'Is there a more competitive edge?', but the need has been satisfied by the capacity in Bermuda, and they should be careful not kill the 'golden goose'.

"I would hope whoever gets in has the clarity to see the importance of Bermuda."

XL Capital CEO Michael McGavick, who gave his view on the election's likely effect on Bermuda's insurance industry in an interview with The Royal Gazette in early May when Sen. Hillary Clinton was still in the running to be the Democrats' nominee, has inside knowledge of American politics, having run for a US Senate seat in 2006 and having served as the chief of staff of Senator Slade Gorton.

And he thinks the Democrats would not carry out the threats made during their election campaigns.

"The obvious answer is that you have a couple of candidates who've said some negative things about Bermuda [Obama and Clinton], although they never specify Bermuda, but they implicate it," Mr. McGavick said.

"And then you have one candidate who's on the record as being relatively friendly. So the tempting, simple answer is that who wins the election will make a big difference. I don't see it that way.

"If there's one thing I know about the US Government and the legislative delivery process of the Congress, it's that the President may have a view going in, but that doesn't mean it will become policy.

"Not just because the legislature may reject it, but by the time the legislature is done debating the real costs of taking that action, then the executive (President) may actually change his or her mind.

"Lots of things are said to get votes. The question is: What action is taken? I think the case for the contribution of Bermuda is so strong that I remain an optimist that cool heads will prevail."

Axis Capital Holdings chairman Michael Butt said it was too early to judge what effect November's election result would have on the Island's insurers.

"It would appear on the face of it that the Republicans are more open to international trade, while a Democratic government could be more protectionist," he said.

US Consul General Gregory Slayton, who was appointed by President George W Bush to be America's top representative in Bermuda, said at the Insurance Day Summit earlier this month that Bermuda's business relations with the US would remain strong, whoever wins the poll.

"If John McCain becomes President, he is a free-trade and low-tax advocate and that would augur well for continuing strengthening of relations," Mr. Slayton said.

"I think if Sen. Barack Obama becomes President, that would also be a positive thing. I have great respect for him and he would bring fresh thinking to the table."