their US counterparts protested that they were enjoying unjust tax advantages.

The news comes in a commentary column in the March 27 issue of Bermuda Insurance by publisher and editorial director Kathryn McIntyre.

"There's no sympathy among risk managers for the cause of US insurers crying foul against Bermuda-based insurers for enjoying unfair tax advantages,'' she wrote.

"Indeed, risk managers intend to defend Bermuda-based insurers against efforts to change US tax law to close what the US insurers say is a loophole that benefits the Bermuda-based companies.'' Ms McIntyre said risk managers and other readers of the business periodical -- who remembered the mid 1980s when they could not find coverage from US-based insurers -- had written to her in droves following a previous column article on the subject.

"They, too, see the irony in US insurers attacking the Bermuda-based insurers they actually helped create by their unwillingness to insure US businesses in the mid 1980s,'' she said.

These risk managers are also preparing to defend the Island when the matter goes before Congress, she continued.

Ms McIntyre quoted one reader who stated: "Hooray for your article! I was so burned up when I read of the attempt to get Congress to close the tax advantage for Bermuda-based companies...It behoves all of us to watch this situation and let our congressmen/women know our concerns.'' And she revealed that: "Another risk manager wrote that he is working to organise risk managers `on opposing this nonsense'.'' Joining the risk managers on Bermuda's side are also some very important public policy issues, continued Ms McIntyre.

She said one tax attorney told her: "If the US does this, it must face the consequences of having invented a new form of taxation that can be applied to the many foreign subsidiaries of US companies, not just insurers, around the world.

"The US has the largest number of foreign subsidiaries and many US insurers reinsure all or most of their business back to the US.

"The foreign governments do not care whether the business is going to a tax haven, it has the same effect if it is going to the US.'' Ms McIntyre said the tax attorney also pointed out: "One of the results of this type of taxation becoming popular would be less reinsurance back to the US; a greater need for moving capital from the US parent to its foreign insurance subsidiaries; and the investment income from this capital being subject to foreign taxation rather than US taxation.

"I would also note that it could apply to the banking industry and many others, for example, the selling of loans by local offices back to the US.'' BUSINESS BUC TAXES TAX