Fewer than a quarter of insurance industry professionals polled by BestWeek US/Canada believe US insurers and reinsurers can compete with firms based in low-tax domiciles and more than half endorsed tax law changes to address the situation.

In an online survey gauging industry opinion on a topic that in recent months has seen attention on the presidential campaign trail, just 24.2 percent of respondents said US firms could still compete with domiciles like Bermuda, while 21.5 percent said though primary insurance was still competitive, the reinsurance market was not, according to a story in BestWeek US/Canada.

"I think that insureds still prefer domestic paper for their policies, making it easier for primary carriers to compete with alien insurers," said Michael Brown, a commercial property underwriter with Golden Bear Insurance Co. in Stockton, California. "Reinsurance cessions, on the other hand, are handled behind the scenes, without the insured's knowledge, so alien reinsurers who have a more advantageous tax basis gain clear advantage."

The remaining 54.4 percent said the US industry was no longer in a competitive position, with most advocating legal changes dealing with reinsurance cessions to offshore affiliates, which have grown from $4 billion to $34 billion in 2007. Under current law, US affiliates of foreign-domiciled insurance groups pay a one percent rate of excise tax on reinsurance premiums paid from a US member to an offshore affiliate, but 44.7 percent of respondents said that was insufficient, compared with 32.7 percent who said it was.