Democratic Party US presidential hopeful Hillary Clinton has revealed plans to eliminate tax benefits to foreign insurers doing business in the US that would have a significant impact on the Bermuda market.

Under a wider plan referred to as an "insourcing" agenda, Senator Clinton proposed a wide range of initiatives to create $7 billion a year in new tax benefits and investments for firms that create US jobs, and to help domestic insurers by cutting a benefit to foreign insurers.

In a statement on the plans, Sen. Clinton said she would "eliminate the unfair advantage that foreign insurers located in tax havens have against US insurers competing for US business".

But Brad Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR), has expressed his disappointment in Sen. Clinton's plans and was keen to point out the important economic contribution of the Bermuda re/insurance market to the US consumer.

"In the last seven years, we have paid more than $25 billion in US property-catastrophe claims alone," he said. "Our companies benefit US consumers enormously. This is recognised by US business and consumer groups which have helped us beat back recent efforts by a handful of very large US insurers which are advocating anti-competitive legislation intended to generally disadvantage non-US insurers competing in the US market.

"We are disappointed in Sen. Clinton's position, but will work with her team if she is elected."

The news came as a coalition of US insurers ramps up its effort to convince legislators to close what they call a "tax loophole" which allows foreign insurers with US operations to cut their income tax through offshore reinsurance arrangements.

The Coalition for a Domestic Insurance Industry is a 14-member group that includes W.R. Berkley Corp, Ambac Financial Group Inc, American Financial Group Inc, Berkshire Hathaway, the Chubb Corp., EMC Insurance Companies, MBIA Inc and Hartford Financial Services Group.

In a letter last year to the House Ways and Means Committee, the coalition called on legislators to adjust the tax code that applies to certain transactions involving the US operations of foreign insurers or there would be a risk that "foreign domiciled insurers will continue to use their tax advantage to gain a greater share of the US insurance market". Coalition spokesman William Berkley stated in a letter to shareholders that his group proposed a change to "level the playing field" between US insurers and foreign companies with US operations. He added he would even consider moving his own company to Bermuda if changes in the US tax code were not implemented.

An overview of the Bermuda market, published by Fitch Ratings last month, said the Island's insurers had a 15-percentage-point tax advantage over their US rivals, a calculation based on data from the past four years.

It also said the tax advantage was the "single most important factor in Bermuda's emergence as an important (re)insurance market".

However Fitch also found the Bermuda market achieved a median net return on average equity 3.3 percentage points better than the US market — 1.8 percentage points better pre-tax — which indicated Bermuda's profitability advantages were "not derived solely from its tax status".