Bermuda's status as the number one destination for insurance and reinsurance start-ups is under threat - that is according to an article by one of the world's most renowned financial publications, London's Financial Times.

The story, entitled 'Paradise lost for Bermuda's short-trousered philanthropists', claims that some executives are worried about the impact Premier Ewart Brown's policies to capture a larger slice of the Island's international business success for Bermudians are having on the business environment.

It quotes Dr. Brown as saying: "The local population cannot be expected to be the kind of spectators they have been in the first 30 years of the industry in the second 30."

Investors and analysts are wondering whether Bermuda can retain its appeal for the industry with some executives growing increasingly nervous about the current business environment ahead of the forthcoming general election on December 18, allied to falling reinsurance prices after two years of spiralling premiums but mild US hurricane seasons, the article says.

Some of Bermuda's reinsurers are looking beyond its sun-drenched shores and are using some of their cash to buy businesses in the US or in Lloyd's of London, having huge implications for the Island, which obtains 25 percent of its gross domestic product from the international business sector.

And with Bermuda accounting for about 30 percent of the capital invested in the global reinsurance market and the money paid worldwide for reinsurance cover, this will have a knock-on effect for the rest of the world, it continues.

Robert Glanville, managing director of Pine Brook Road Partners, a US private equity firm, is quoted as telling an audience in Hamilton: "Capital tends to vote with its feet about where it feels most loved."

The story claims that a particular flashpoint has been proposals to make fixed-term work permits contingent on training a Bermudian to take over the role.

Furthermore, experts believe that if a big disaster struck next year and forced up the cost of cover, the Island would not automatically attract the vast majority of the capital required, while Mr. Glanville is said to reckon other tax-friendly jurisdictions have learnt the Bermuda model and are starting to copy it to their benefit.

This is a fact acknowledged by Finance Minister Paula Cox, who is quoted as saying: "For the Bermuda model, a testament of its success is that it is being imitated, and imitation is certainly the most sincere form of flattery.

"They will not get the ingredients right in terms of all that we have to offer.

"But clearly, we are operating in a very competitive environment, and that is why we constantly look at how to raise the bar."

Another threat is looming according to the article, is the group of powerful US insurers currently lobbying Washington to limit the tax breaks available to insurers that write business in the US but are based in tax-friendly locations, such as Bermuda.