BERMUDA'S long-term viability as the off-shore domicile of choice for international insurance and reinsurance ventures is being increasingly jeopardised by Government actions which are "alienating" the industry, Insurance Day magazine reported yesterday.

In a front-page report, the industry trade paper quoted a senior director at a leading actuarial firm as saying Bermuda would probably lose new business to rival jurisdictions in the coming months – and some firms based here may look to move their business elsewhere.

"He believes last month's decision by the Government to introduce photo-ID cards to foreign workers could have serious repercussions," said the magazine.

"Although Bermuda Home Affairs Minister David Burch said he did not anticipate any fall-out from international business over the controversial plans, the director told Insurance Day: 'At the moment everyone is occupied by other things: just keeping your job is considered a bonus by some. But what I am hearing from my contacts on the island is that those companies which have done so much to put Bermuda on the map – and to put money into its economy – are not happy with the treatment they're getting. Many feel it has alienated them and are reconsidering their position'."

The abrupt decision by Bermuda-domiciled Hiscox to close its local Custom Risk Reinsurance unit – less than six months after it was created – will "no doubt strengthen the hand of those who see Bermuda's dominance . . . waning," said Insurance Day.

"At the Insurance Day Bermuda symposium in June Validus Re chairman and chief executive Ed Noonan openly questioned Bermuda's future status as the number-one centre to establish a start-up (insurance or reinsurance venture) quickly in response to market-changing events."

Opposition Senator Michael Fahy yesterday said the Insurance Day report was completely at odds with ongoing Government claims boasting of the stability of the island's off-shore insurance and reinsurance sectors.

"The front page of the December 4 edition of the widely read Insurance Day is a case in point, with its report on doubts about Bermuda within the industry," said Sen. Fahy. "It follows a negative article about Bermuda in the September 2008 edition of Global Reinsurance magazine, in which a survey of Bermuda-based insurance executives reported that 80 per cent thought reinsurance companies should consider their exit strategies as a result of Bermuda's political situation while just 20 percent said politics was a concern but that it should not impact the industry.

"When we consider such articles in influential magazines about Bermuda's future, when we consider that a top executive's credentials are openly questioned in the Senate following his remarks about an 'extremely real' tax threat from the US, when we consider the Premier's outburst about an upcoming UK review of Bermuda's regulatory regime and when Bermuda is mentioned as a tax haven in the international press, there is cause for serious concern. It suggests that not enough is being done to protect the first pillar of our economy."

Sen. Fahy said he believed Finance Minister Paula Cox was doing the best she could to resassure the industry of an ongoing Government commitment to the off-shore sector.

"But her job is made more difficult by negative messages sent by her own colleagues, most recently the Government Leader in the Senate and the Premier," he said.

"It is vital that we do whatever we can to protect Bermuda's sterling reputation. Recent statements by Ms Cox's colleagues reflect a clumsy, ill-considered and irresponsible approach to the international business community. The stakes are too high for Government leaders to make careless remarks that do nothing but alienate the very people who contribute so much to our economic well being.

"We are creating uncertainty where none should be. We are making it easier for our competitors to lure away our business. It makes no sense and we implore the Finance Minister to read the riot act to her colleagues. That we should be worsening the climate for business just as the world is entering a period of recession is the height of irresponsibility."